The U.S. Justice Department has announced that seven defendants were arrested and arraigned for their roles in a mortgage fraud conspiracy that operated in Detroit. A federal grand jury in the Eastern District Court of Michigan indicted Peter Allen, Suhail Hallak, Al Karana, Joey Murad, Jason Najor, Jeffrey Najor and Wasseem Shamoun with conspiracy to commit bank fraud, numerous counts of bank fraud and other fraud charges. The indictment alleges that from approximately January 2006 to December 2008, the defendants conspired to defraud lending institutions by obtaining mortgage loans using fraudulent information. According to the indictment, the defendants devised a scheme wherein they purchased property for approximately $5,000 to $40,000 per home, then recruited straw buyers to submit fraudulent loan applications for home mortgages in exchange for a fee. According to the indictment, the scheme caused financial institutions to pay approximately $10 million in fraudulent mortgage loan funds. In addition to the conspiracy charge, Hallak, Karana, Jason Najor, Jeffrey Najor, and Shamoun are charged with 20 counts of bank fraud, Murad is charged with seven counts of bank fraud and Allen is charged with two counts of bank fraud. Jeffrey Najor is also charged with two counts of assisting in the filing of false tax returns, in connection with his filings on behalf of J.A. Najor Corporation. Jeffrey Najor is also charged with one count of bankruptcy fraud. An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty. If convicted of the conspiracy charge, the defendants face up to 30 years in prison and a $1 million fine. Each count of bank fraud carries a maximum penalty of 30 years in prison and $1 million fine. Assisting in the filing of a false return is punishable by up to three years in prison and a fine of $250,000. The bankruptcy fraud charge has a maximum penalty of five years in prison and a fine of $250,000.