Sixteen individuals have been charged in relation to a telemarketing scheme to sell houses to investors in most of the U.S., including Michigan, according to a joint announcement by U.S. Attorney for the Eastern District of Michigan Barbara McQuade and Special Agent in Charge of the FBI Detroit Field Office Paul Abbate.
The perpetrators of the scheme caused more than $20 million in losses to their nearly 300 victims, according to the announcement. Victims of the scheme resided in Canada as well as in 46 states, but Detroit was one of the areas most affected by the scam.
According to the indictment, the telemarketers operated from call centers in Florida and New York and made unsolicited calls to potential investors offering to sell them homes in the Detroit area. The telemarketers told their victims that the homes were bank-owned and were worth much more than their current sales price, when in reality many of the homes were purchased for as low as $500 and quickly sold to the victims for between $7,500 and $15,000.
The telemarketers then led the victims to believe that the purchased homes were being sold to hedge funds or foreign buyers for huge profits when in reality the homes were being transferred to shell corporations created by the telemarketers where there was no profit. Using this scheme, the telemarketers convinced many investors that there was a lucrative home-flipping market in Detroit, enabling them to sell thousands of homes to investors using these tactics. The telemarketers used aliases and changed the name of the company many times to avoid detection from law enforcement and disgruntled investors who realized they had been defrauded.
In addition to the millions of dollars that the telemarketers obtained through fraud, the scheme perpetuated the spreading of blight in Detroit due to the large number of homes vacated and not maintained. Wayne County, where Detroit is the county seat, just began foreclosure proceedings on a record 75,000 properties. About 62,000 of those properties are located in Detroit, and about half of those 62,000 are believed to be unoccupied.
"This nationwide telemarketing fraud not only caused millions of dollars in losses to victims of the scheme, but it also contributed to blight in Detroit neighborhoods," McQuade said. "Thousands of homes were left to fall into decay as a result of these individuals using Detroit real estate as a commodity to accomplish their fraud."
Perpetrators of the scheme were charged with conspiracy to commit mail and wire fraud, 15 counts of underlying wire fraud, and conspiracy to commit international money laundering, with each of the 17 counts carrying a potential sentence of up to 20 years in prison.
Those arrested and charged were Izhak Halbani, Antawn Reid, Scott Amster, Richard Silverstein, Michelle Pintado, John Trumble, Wayne Scott Thompson, Theodore Jacobs, Joseph Haden, Scott Lipman, and Steven Goldstein, all of Florida; Richard Pierce and Matthew Golden of Michigan; and Erez Arsoni, Gregory Swarn, and Joseph Arsenault of New York.
"The perpetrators in this case stole millions of dollars from hundreds of victims," Abbate said. "However, they did more than steal money – their greed and fraud compounded the proliferation of vacant homes left for ruin in far too many Detroit neighborhoods. The FBI is committed to rooting out and bringing to justice those who would commit crimes of this nature and act against the interests of our communities."