(CHICAGO) Four men, including a Chicago attorney and a Lincolnwood investment advisor, defrauded investors out of nearly $3 million through a phony mortgage scheme which they carried on for more than three years.
Albert Rossini, 67, of Skokie, was the owner of Devon Street Investments in Lincolnwood, where he fraudulently induced at least 15 people into buying phony mortgage notes on apartment buildings in foreclosure, buildings which his firm neither owned nor managed, according to the U.S. Attorney’s office.
Assisting in the scheme, which ultimately pulled in at least 15 victims, were Babajan Khoshabe, 74, of Chicago; and his son, Anthony Khoshabe, 33, of Skokie, who “promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process,” the indictment states.
But trio did not own such mortgage notes, and instead, used the funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment.
The fourth defendant, Thomas Murphy, 61, of Chicago, was a licensed attorney who “claimed to validate the sale of the mortgage notes through a phony ‘Guaranty Agreement’ that he prepared and gave to Rossini to present to the victims,” according to the indictment.
The indictment, filed Thursday and unsealed Tuesday, charges Rossini and Murphy with 11 counts of wire fraud and three counts of mail fraud. Babajan Khoshabe is charged with eight counts of wire fraud and three counts of mail fraud; and Anthony Khoshabe with five counts of wire fraud and three counts of mail fraud. All four to appear before U.S. Magistrate Judge Mary Rowland on Tuesday.
The scheme has been going on since about September 2011, according to federal prosecutors.
Rossini and Babajan Khoshabe would tell investors that Anthony Khoshabe “managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments,” the indictment alleges. They claimed he would collect monthly rent from occupants and turn it over to investors.
But Reliant did not manage the properties, and Anthony Khoshabe had no legal right to collect rents, the indictment alleges. The periodic payments made to investors were taken from funds pledged by other investors.
In all, the indictment seeks forfeiture of $2.92 million in cash; three certificates of deposit totaling $700,000; two properties in Skokie and one on the North Side of Chicago.
Wire and mail fraud counts carry a maximum penalty of 20 years in prison and $250,000 fines, plus mandatory restitution.
Prosecutors are also looking for people or corporations that might have been victims of the scheme. They are urged to call the FBI at (312) 421-6700.
