Federal Court records show that on February 2, 2007 First Magnus Financial Corporation filed a civil complaint in the Nevada District Court against a number of defendants, the key ones have been named below.

Tyson Rondeau a former loan officer with First Magnus
Paul Hill Sr. and Paul Hill II and Accurate Accounting and Innovative Tax Service, 28235 Southfield Road, Lathrup Village, Michigan 48076
Brian Haneline who owned ACE APPRAISALS CORPORATION, 1450 W. Horizon Ridge Parkway, Suite B-304, Henderson, Nevada 89012
Cordebella Los Gatos Trust
Rafik, Inc
Cara Maria Gudelis owner of Options Are Us.
7540 Key Royale Trust
Michael Mullins
Panther Investments
Dwayne R. Smith
Rudolph Straat
Emmett Garfield Traylor
Lawyers Title of Nevada, Inc (accused of negligence in the closing of one property)

In the complaint FMFC alleges that defendants conducted a massive scheme of fraudulent real estate transactions involving residential properties located in Las Vegas, Nevada and Greater Metropolitan Phoenix, Arizona. The fraudulent investment scheme used straw buyers to purchase residential property in Nevada and Arizona, often from other members of the fraudulent investment scheme, with the intent to lease the properties for a period of time before selling the properties and splitting the profits among the members of the fraudulent investment scheme.

The members of the fraudulent investment scheme not only set up the residential mortgage transactions but assisted the straw buyer in submitting the necessary paperwork and information, often fraudulent, to convince FMFC to loan the straw buyer money to purchase the property. One straw buyer would often purchase multiple properties.

After the straw buyer signed the loan agreement and deed of trust necessary to complete the residential mortgage transaction, the property would be transferred, without notifying FMFC, to a trust whose Trustee was involved in the fraudulent investment scheme.

The fraudulent investment scheme then called for the Trustee to lease the properties to tenants who were given an option to buy the property. To entice the tenants, or even the buyers, the members of the fraudulent investment scheme promised them money and even cars. Pursuant to the fraudulent investment scheme, the Trustee was to sell the property, often to another straw buyer/member of the fraudulent investment scheme, and split the profits with other members of the fraudulent investment scheme.

The members of the fraudulent investment scheme, however, could not always deliver tenants or purchasers and several of the straw buyers were stuck with properties for which they could not pay the loan obligations.

As a result, several of the straw buyers defaulted on their loan obligations, forcing FMFC to foreclose on the property in an attempt to mitigate its losses through the foreclosure sale. Because the loans were issued fraudulently, and at times at inflated purchase prices, FMFC incurred significant losses due to the costs of remedying the fraud. FMFC has been damaged in an amount in excess of $925,000

Fraudulent information included fraudulent verifications of deposit, fraudulent letters concerning the source of the straw buyer’s income, fraudulent verifications of employment and fraudulent applications, which included the straw buyer’s intent to occupy the residence, the straw buyer’s current residence and the straw buyer’s liabilities.

Properties mentioned in the indictment are:

7540 Key Royale Court, Las Vegas, NV
5720 Mount Athos, North Las Vegas, NV
22226 Los Gatos, Sun City West, AZ

No date for trial has yet been set. Please click here to read the Civil Complaint.

In the following press release Alice H. Martin, United States Attorney for the Northern District of Alabama announced that LADON CHRISON BAFFIELD has been indicted by a federal grand jury for conspiracy to defraud the U.S. Government with respect to claims and wire fraud. 

BAFFIELD, 42, of Madison, Alabama, owned and operated LCB Financial Services (LCB) and Titanium Mortgage.  BAFFIELD through LCB engaged in the business of preparing and filing income tax returns for taxpayers.  As a part of his business BAFFIELD offered refund anticipation loans to taxpayers in the amount of their income tax refunds, less a fee to LCB.

“The ‘quick money’ from Refund Anticipation Loans is appealing to dishonest tax preparers and some citizens.  I wonder if defendants can even remember how they spent the money once they go to jail,” said U. S. Attorney Alice H. Martin.

The indictment alleges in Count One that from April 2002 until about June 2002, BAFFIELD conspired with Walter Sullivan, who owned Just That Fast Tax, to defraud the U.S. Government by obtaining and aiding to obtain the payment and allowance of false and fictitious and otherwise fraudulent claims.  They filed false returns by amending 1999 and 2000 federal income tax returns claiming refunds which LCB knew the taxpayers were not entitled to receive, without the knowledge of the taxpayers who had employed LCB.  BAFFIELD caused about eighteen false amended returns to be filed and falsely claimed about $30,406 from the U.S. Government. 

Count Two alleges that in June 2005, BAFFIELD committed wire fraud in that he transmitted false information through Titanium Mortgage to Finance America in an effort to obtain a mortgage loan.  Finance America sought verification of a business license included in the mortgage loan package, and learned from the Madison County license department that the business license had been altered. 

Elleanor Spann of Columbus, SC pleaded guilty yesterday to preparing false tax returns for co-conspirators in a mortgage fraud. The false returns were provided in 2000 and 2001 to Branch Bank and Trust Company to support income for mortgage applications. Spann is the owner and operator of Nora’s Tax Service.

Click here to read the indictment. No other details are known at this time.

Gregory A. White, United States Attorney for the Northern District of Ohio, today announced that a federal grand jury in Cleveland returned a 79-count superseding indictment, charging a Cleveland area certified public accountant, Abrar U. Haque, of conspiring with others to operate a criminal enterprise through his accounting business, Abrar CPA, Inc., on Lorain Avenue, in Cleveland.

Click here to read the indictment (60+ pages)

In addition to Haque, 14 others are charged in the indictment, which replaces a pending indictment, which was returned on April 13, 2005, against Haque, his wife, Nuzaira Haque, and two business associates, Mohammed Shahabuddin and Omar Abedrabbo, for offenses including money laundering, health care fraud, and bank fraud, among other charges. All four of the defendants in that prior indictment are also charged in the new superseding indictment.

In addition, ten employees, former employees and clients of Abrar CPA, Inc., are now also charged, with offenses ranging from mail and wire fraud to immigration fraud and tax offenses. The defendants and the various alleged offenses follows:

MOHAMMAD HAMMAD (53) 1434 Robinwood Drive, Lakewood, Ohio 44107
NIHAD DOLEH (55) 1434 Robinwood Drive, Lakewood, Ohio 44107
NESREEN ASSAD (29) 3150 Oakwood Lane, Westlake, Ohio 44145
HANI OTTALLAH (37) 3150 Oakwood Lane, Westlake, Ohio 44145
AYMAN ABDELHADY (32) 1315 Cobblestone Chase, Westlake, Ohio 44145
AMEED ABUZAHRIEH (35) 7593 Fairfax Lane, Strongsville, Ohio 44136
ZIAD SUMRAIN (45) 9911 Lakeview Circle, Strongsville, Ohio 44136
MARWAN MUSTAFA (33) 11008 Fortune Avenue, Cleveland, Ohio 44111
OMAR ABEDRABBO (35) 1361 Cove Avenue, Lakewood, Ohio 44107
MOHAMMED SHAHABUDDIN (54) 6967 York Road, Apt. 114, Parma Heights, Ohio 44130
NUZAIRA M. HAQUE (39) 173 Weatherstone Drive, Berea, Ohio 44017
ABDUR RASHID (34) 3714 West 143rd Street, Cleveland, Ohio 44111
AKRAM HAQUE (41) 13641 Burlwood Drive, Strongsville, Ohio 44136
ABRAR U. HAQUE (44) 173 Weatherstone Drive, Berea, Ohio 44017
YAMIN IMRAN (34) 25151 Brookpark Road, Apt. 411, North Olmsted, Ohio 44070

According to the superseding indictment, from January 1, 1999 through June 30, 2005, Haque and several of his employees, including his brother, Akram Haque, and Abdur Rashid, both named with Abrar Haque in the Racketeer Influenced and Corrupt Organizations (RICO) conspiracy charge in Count One, conspired between themselves and with certain other employees, clients and customers of the accounting business to conduct the affairs of the enterprise, Abrar CPA, Inc., through a pattern of racketeering activity. Such activity allegedly included mail fraud, wire fraud, bank fraud, immigration fraud, money laundering and the interstate transportation of money obtained by fraud.

Among the practices engaged in by the enterprise, as described in the superseding indictment, were the following:
1. The preparation of false payroll records;
2. The preparation and filing of false payroll reports and tax returns;
3. The preparation of false income and wage documents in support of loan and credit applications;
4. The provision of false information and documentation for immigration purposes, and to obtain various government benefits;
5. The laundering of currency for a fee; and
6. The filing of false employment tax reports for Abrar CPA, Inc., and for the Al Ihsan School of Excellence, an Islamic elementary school, located at 4600 Rocky River Drive in Cleveland, which Abrar Haque founded and managed.

The remaining defendants, not charged in the RICO conspiracy count, are charged in a variety of substantive fraud and tax offenses, as shown on the chart. There is also a provision in the superseding indictment seeking the forfeiture to the government of the Haque residence in Berea, Ohio, and $59,233.00 in currency seized during a search of that home last year.

If convicted, each defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney James V. Moroney, following an investigation by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation Division; the U.S. Department of Labor, Office of Inspector General; and the U.S. Social Security Administration, Office of Inspector General.

A superseding indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Update on Friday, January 12, 2007 at 09:54AM by The Editor - Ian Shuter

In a press release on January 10, 2007 the US DOJ announced that Abrar Haque was sentenced to imprisonment for 144 months, followed by supervised release for three years. He was also ordered to forfeit $200,000 and to pay $6,100 in special assessments. Haque was convicted by a federal jury on October 16, 2006 on 61 felony counts following a three-week jury trial. Haque was convicted of conspiring to operate the affairs of an enterprise through a pattern of racketeering activity (RICO); conspiring to launder money; conspiring to impair and impede the lawful functions of the Internal Revenue Service; numerous individual counts of subscribing false federal income and employment tax returns; numerous individual counts of aiding and abetting mail, wire, and bank frauds; Medicaid fraud; and making false statements to the Federal Bureau of Investigation. Akram Haque, age 32, residing at 1486 Victoria Avenue in Lakewood, Ohio, the brother of Abrar, was sentenced to 30 months imprisonment, followed by three years of supervised release. Akram Haque was employed at his brother’s accounting firm. He was convicted on the RICO charge, the tax conspiracy, and five counts of subscribing false income tax returns.

Abdur Rashid, age 35, residing at 3714 W. 143rd St. in Cleveland, was the imam of the Islamic Mosque and another employee at Abrar CPA, Inc. He was sentenced to 27 months’ imprisonment followed by three years of supervised release. Rashid was convicted on the RICO and tax conspiracies, and four counts of subscribing false income tax returns.

Nuzaira M. Haque , wife of Abrar, age 39, was convicted of using a Social Security account number obtained with false information. She was sentenced to a term of two years’ probation and faces possible deportation.

Omar Abedrabbo, age 35, currently residing in Pembroke Pines, Florida, was convicted of conspiring to launder money with Abrar U.S. v. Haque. Abedrabbo was sentenced to a term of two years’ probation with the first six months in home confinement with electronic monitoring.

Yamin Imran, age 35, residing at 5715 Northwinds Drive, Apt. 43, in Mentor-on-the-Lake, Ohio, was convicted of making false statements to the FBI regarding his employment at Abrar CPA, Inc. Imran was sentenced to a term of one year probation, and faces possible deportation.

Mohammed Shahabuddin, age 54, 6967 York Rd., Apt. 114, Parma Heights, Ohio, was convicted of structuring currency transactions in connection with the money-laundering conviction. He was sentenced to two years’ probation, and faces possible deportation.

Remaining defendants were sentenced to terms of probation following their guilty pleas to mail, wire, and immigration fraud, and interstate transportation of property obtained by fraud.

Yahoo Finance reports that Terrell L. Harris, United States Attorney for the Western District of Tennessee and James M. Cavanaugh, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Nashville Field Division, announced that the federal jury returned a verdict of guilty, yesterday, as to all Counts of the Indictment in United States v. Gerald Rayborn. Rayborn, a 59-year old male, was charged with Conspiracy to commit wire fraud, mail fraud, and money laundering, and in addition two counts of mail fraud, and one count of money laundering. Gerald Rayborn is the pastor of the New Mount Sinai Missionary Baptist Church located on Horn Lake Road in Memphis, Tennessee.

Click here for the Court Case Docket Report

The Indictment described that Rayborn conspired with Larry Bullock, a Certified Public Accountant, to submit fraudulent tax returns to a mortgage company to obtain a mortgage loan. In a separate trial, on June 8, 2005, Bullock was convicted by a federal jury of the same charges except he was not charged with the one count of money laundering.

Honorable J. Daniel Breen, U.S. District Judge, presided over both trials, Rayborn and Bullock. Rayborn’s trial commenced on Monday, July 11, 2005. Rayborn will be sentenced on October 14, 2005. He faces a possible sentence of 65 years of imprisonment.

The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys, Kevin P. Whitmore and Cam Jones, were the prosecutors assigned to the case.

Update on Monday, July 2, 2007 at 10:01AM by The Editor - Ian Shuter

On July 2nd, 2007 an appeal against the conviction of Ryaborn was rejected by the Sixth Circuit Court of Appeals.  Rayborn was convicted two years ago of lying about his income on a loan application for a $500,000 house. He was convicted of conspiracy to commit mail fraud, wire fraud and money laundering while buying the house in 2002.

The appellate court upheld the conviction, rejecting arguments that trial jurors got inaccurate legal instructions from the judge. Please click here to read the Court’s Opinion.

US DOJ Press Release – February 4, 2005

Springfield , Illinois — Jan Paul Miller, United States Attorney for the Central District of Illinois, announced that a federal grand jury has returned an indictment charging Gary D. Harpole, age 58, of Daytona Beach, Florida with making false representations to two Quincy area banks. Read the indictment by clicking here

One of the counts relates to allegations that from January 14, 2000 to April 13, 2000, Harpole made false statements and willfully overvalued property to influence First Bank of Quincy, Illinois, to refinance a loan in the amount of $228,937 on three properties located in Quincy, Illinois. Harpole allegedly provided the bank with federal income tax returns that were different from the returns filed with the Internal Revenue Service in that they overstated Harpole’s income. The indictment further alleges Harpole provided the bank with a false financial statement that failed to include various loans from the Corn Belt Bank and Trust Company as well as two $100,000 loans Harpole had received from business partners.

Update on Thursday, July 7, 2005 at 01:31PM by The Editor - Ian Shuter

On April 29, 2005 the US DOJ announced that Harpole has pleaded guilty and was due for sentencing on September 2nd, 2005.

Chicago Sun Times - November 30, 2004

A treasurer and an accountant for a financial institution accused in a $100 million fraud case admitted Monday to covering up mass theft by their politically connected bosses, and agreed to testify against them.

Click here for a copy of the indictement

George J. Stimac, a certified public accountant with Intercounty-Illinois , and James R. Wallwin, treasurer of the company, pleaded guilty Monday to insurance fraud. They said they lied about the finances to hide that Laurence W. Capriotti, owner and president of Intercounty Title and ITI Enterprises Inc., and board chairman Jack L. Hargrove were stealing millions from an escrow account.

Allegedly at the direction of Capriotti and Hargrove, Stimac and Wallwin said they falsified reports to hide the stolen money. By 1999, $15 million was improperly transferred from an escrow fund to an operating fund to shore up shortfalls, according to the plea agreement.

Capriotti and Hargrove have pleaded not guilty to charges of mail and wire fraud and tax evasion.

Intercounty-Illinois, formerly at 120 Madison, was a title insurance agent for Stewart Title Guaranty Company of Texas. After 1991, Capriotti and Hargrove each owned about half of Intercounty. Intercounty sold insurance policies issued by Stewart to Chicago customers and also held millions of dollars of escrow money meant for real estate deals. Prosecutors accuse Capriotti and Hargrove of misusing money ordered to be kept untouched in escrow.

Update on Wednesday, November 2, 2005 at 10:47AM by The Editor - Ian Shuter

On September 15, 2005 Jack Hargrove was convicted by a jury on 10 counts and aquitted of 2 other counts. On October 14, 2005 an appeal against the verdict was lodged with the court. No date for sentencing has been set.

Update on Wednesday, November 2, 2005 at 10:52AM by The Editor - Ian Shuter

On July 14 2005 Laurence Capriotti entered a guilty plea. No date for sentencing has yet been set. Please click here to read the plea agreement.

Update on Wednesday, November 2, 2005 at 10:58AM by The Editor - Ian Shuter

The trial of Michael Thyfault was held and on September 15, 2005 he was aquitted on one count and the jurt were unable to reach a verdict on four other counts. No date for a retrial has been set and Thyfault has lodged a Motion for Aquittal with the court.