Isaak Khafizov, a former owner of American Home Recovery (AHR), a mortgage loan modification business in New York, was sentenced in Manhattan federal court to nine years in federal prison in connection with a mortgage modification scam that defrauded hundreds of homeowners and lenders.
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.
"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 (SIGTARP), in a press release.
AHR was founded by Khafizov in 2008. From the spring of 2008 through the summer of 2009, Khafizov used AHR to commit systematic fraud that preyed on homeowners.
Khafizov and AHR's salespeople fraudulently induced distressed homeowners all over the United States to pay AHR thousands of dollars in up-front fees by falsely promising the homeowners relief from their financial problems.
The company, and Khafizov, promised homeowners better interest rates and lower monthly fees, and that homeowners had been "pre-approved" for mortgage modifications by their lenders. AHR falsely represented itself as affiliated with government agencies, and that AHR possessed special expertise in mortgage modifications.
After receiving the large up-front fees from homeowners, Khafizov and AHR did little or no work to try to renegotiate the homeowner's mortgage.
The release noted, "On the rare occasion when Khafizov succeeded in getting a homeowner a mortgage modification, he typically did so by coaching the homeowner to lie about his or her income and assets on forms submitted to the mortgage lender."
In total, Khafizov defrauded hundreds of consumers out of over half a million dollars in fees.