Fraudulent mortgage modifier sentenced to nine years in federal prison
Dangled TARP dollars, then defrauded hundreds of homeowners
Isaak Khafizov, 27, was sentenced to nine years in federal prison for operating a fraudulent mortgage modification operation that defrauded hundreds of struggling homeowners out of more than half a million dollars.
Khafizov was convicted in May 2012 of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud after a 10-day jury trial presided over by U.S. District Judge George B. Daniels, who also imposed the sentence in Manhattan federal court on Wednesday.
Khafizov founded American Home Recovery in 2008 with Jaime Cassuto and David Cassuto, who each pleaded guilty to multiple counts of fraud in April 2012 and are currently awaiting sentencing. From the spring of 2008 through the summer of 2009, Khafizov and his partners used AHR to commit a systematic fraud that preyed on distressed homeowners all over the country.
Khafizov and AHR’s salespeople contacted distressed homeowners and convinced them to pay AHR thousands of dollars in up-front fees by promising that AHR could get them better interest rates and lower monthly fees, that the homeowners had been “pre-approved” for mortgage modifications, that AHR was affiliated with the government’s Troubled Asset Relief Program, and that AHR would return the up-front fees if they did not succeed in getting the homeowner’s mortgage modified.
After receiving those up-front fees, Khafizov and AHR did little or no actual work to renegotiate the homeowners’ mortgages. In the rare event that AHR did succeed in modifying a homeowner’s mortgage, it was typically accomplished by coaching the homeowner to lie about their income and assets to the mortgage lender.
“Khafizov thought he had found his meal ticket scamming struggling homeowners during the height of the housing crisis, and he now has the next nine years in federal prison to think about how he destroyed so many peoples’ lives,” said Christy Romero, Special Inspector General for TARP. “At trial, victims described receiving late-night phone calls from Khafizov, who claimed that mortgage lenders were demanding that fees be paid to him right away to ensure the immediate approval of the homeowners’ applications to lower their mortgage payments under TARP’s housing programs.
“Khafizov’s lies swindled homeowners out of their hard-earned savings, savings Khafizov used to purchase luxury cars and to pay personal expenses. I want to thank U.S. Attorney Preet Bharara and the fine Assistant U.S. Attorneys on the case for aggressively working to bring justice for the victim homeowners. SIGTARP and our law enforcement partners will continue to bring to justice all those exploiting the federal government’s response to the financial crisis through TARP.”
In many cases, Khafizov and AHR directed homeowners to stop paying their mortgages and pay AHR its fees instead. Because AHR didn’t do any work to modify the homeowner’s mortgages, many of AHR’s customers had their homes foreclosed on.
In sentencing Khafizov, Judge Daniels remarked that victims who feared “being thrown out of their homes” were “desperately seeking help” from Khafizov because he “promised to solve what, for most of these people, was the most serious problem that they had ever encountered in their lives.” But Khafizov “took advantage of every one” of them and “…showed a callous disregard for the consequences of his criminal conduct on the victims he swindled.”