A federal grand jury in San Francisco has indicted Michael Ohayon and David Papera with conspiracy to commit bank fraud, and money laundering, United States Attorney Joseph P. Russoniello announced. According to the indictment, Ohayon and Papera are alleged to have recruited 13 straw buyers who used their good credit scores to obtain more than $19.6 million in fraudulent residential mortgage loans from Washington Mutual Bank, with no intention of making either downpayments or mortgage payments on the properties. The indictment further alleges that Ohayon, with Papera’s knowledge, told the straw buyers that an entity controlled by Ohayon and Papera would use the loan proceeds to make the down payments and mortgage payments. Ohayon and Papera created and submitted to Washington Mutual Bank loan applications with numerous misstatements as to the straw buyers’ income and assets.
Ohayon and Papera are currently out of custody. They are scheduled to make their initial appearances on the indictment at 9:30 a.m. on Feb. 16, and Feb. 22, respectively, before the Honorable Maria-Elena James.
The maximum statutory penalty for each count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, and bank fraud, in violation of 18 U.S.C. § 1344, is 30 years’ imprisonment, a fine of $1 million and restitution. The maximum statutory penalty for each count of money laundering, in violation of 18 U.S.C. § 1957, is 10 years’ imprisonment, a fine of $250,000, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Tracie L. Brown is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of a three-year investigation by IRS-CI and the Federal Bureau of Investigation.
For more information, visit www.usdoj.gov.