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February 22, 2007
JURY CONVICTS TWO IN FRAUDULENT BUSINESS LOAN SCHEME
(HOUSTON) Yerisoibi FLORENCE HAMILTON, 46, and IGBANIBO C. NATHAN, 47, both of Houston, have been convicted by a jury’s verdict of conspiracy, bank fraud, money laundering and conspiracy to commit money laundering arising from a scheme to defraud a federally insured bank and the Small Business Administration of more than $1.8 million, United States Attorney Don DeGabrielle announced today.
The charges on which the defendants were convicted involved a fraudulent loan scheme devised between March 7, 2000 and June 30, 2000, to fraudulently obtain a United States Small Business Administration guaranteed loan in the amount of $2.4 million from a Houston area federal insured banking institution to fund the purchase of a warehouse and laundering approximately $473,000 of the proceeds. The jury returned its verdict convicting Hamilton and Nathan on Tuesday, February 20, 2007.
Evidence presented during the two week trial established that First American Trading Company, Inc. ("1st American") negotiated through a loan broker to purchase a warehouse at 7413 Mesa Drive in Houston, Texas, ("the Mesa Drive warehouse") for $1.5 million. American Traders Enterprises, L.P. ( "American Traders") acted as a straw purchaser and seller of the Mesa Drive warehouse in a land flip. YERISOIBI FLORENCE HAMILTON was an escrow officer who worked for Chicago Title Insurance Company (Chicago Title), a title company in Houston, Texas.
IGBANIBO C. NATHAN was the owner of Security Mortgage Co., and the former husband of HAMILTON.
Beginning in March 2000, through its owners, 1st American completed an application for an SBA guaranteed business loan in the amount of $2.4 million for the purchase and the improvements of a warehouse located on Mesa Drive in Houston, Texas ("Mesa Drive warehouse"). The Mesa Drive warehouse sale price was actually $1.5 million. 1st American owners caused Banco Popular to approve the loan based upon a false representation of the sales price as $2.2 million and submitting false documentation of their own injection of $600,000 of the total costs for the real estate and improvements.
Following the approval of the loan, the 1st American owners entered into an agreement to purchase the Mesa Drive warehouse from American Traders for $2.2 million. Three days later, on May 8, 2000, 1st American entered into an agreement to buy the Mesa warehouse from the seller for $1.5 million.
Meanwhile, the 1st American owners continued with the loan process with Banco Popular to secure the $2.4 million SBA guaranteed loan and signed a settlement agreement representing that approximately $1.85 million was to be used to purchase the warehouse. On May 19, 2000, HUD settlement agreements were signed representing that 1st American was purchasing the Mesa Drive warehouse for $2.2 million. Three days later, a business associate of the broker, purchased three official checks totaling $375,000 made payable to Chicago Title Company showing 1st American Trading , Inc. as the remittor, and submitted the checks to the title company as the required payment at the loan closing. The same day, HAMILTON , at Chicago Title, faxed copies of these cashier’s checks to the attorney for the bank to show that indeed 1st American had made its required cash injection towards the purchase of the warehouse and also faxed a copy of the settlement statement (HUD-1) for 1st American to Banco Popular to obtain disbursement of loan proceeds to 1st American.
On May 23, 2000, Banco Popular wired $1,846,469 in loan proceeds to the escrow bank account for Chicago Title. HAMILTON then issued two checks from Chicago Title as a disbursement from the escrow proceeds from the loan to 1st American. One check, in the amount of $666,928, was made payable to American Traders. A second check in the amount of $35,000 was made payable to Security Mortgage Co., which was owned by NATHAN. The same day, NATHAN deposited the $35,000 in his company account and then issued a check from that account in the amount of $12,000 made payable to the broker’s business associate who had originally purchased the checks.
On May 23, the $666,928 Chicago Title check made payable to American Traders was deposited by into 1st American’s company account and secured several cashier’s checks. One check in the amount of $225,000 was made payable to the broker’s business associate. Another check in the amount of $110,000 was made payable to American Trading Co. A third check in the amount of $150,000 was made payable to another individual. Two days later, a 1st American owner purchased another cashier’s check in the amount of $138,000 made payable to American Trading Co.
On May 24, 2000, the broker’s business associate deposited the $110,000 cashier’s check made payable to American Trading Co. into a bank account of 1st American. The following day, he deposited the $138,000 cashier’s check made payable to American Trading Co. into accounts of 1st American at Metro Bank.
Over the course of the next several days several other checks drawn from the proceeds of the SBA guaranteed loan were issued to other defendants including a $6,000 check payable to one of the owners of 1st American, a $375,000 check to Chicago Title Company from which a $7,000 check was made payable to yet another defendant through Suncoast Construction, and a $10,000 check made payable to the owner of American Traders drawn on the company’s account at Sterling Bank.
Faisal Saeed Khan, one of the two owners of First American Trading Company, Inc. ("1st American"), plead guilty prior to trial and testified regarding his role and that of his co-defendants at trial. Mehmood Nazarani, a/k/a Ali Nazarani, co-owner of 1st American, is also charged in this case, but remains a fugitive.
American Traders Enterprises, L.P. ("American Traders") was an assumed name for a partnership between Ahmed Shah and another individual. Shah, also named as a co-defendant in this case, is a fugitive.
Noman Tabani, a loan broker in Houston, Texas, who represented 1st American in connection with its loan application to purchase of the Mesa Drive warehouse, is charged in this case and is also a fugitive.
Maged Abuzaid, a business associate of Tabani, has pled guilty in another case.
Hamilton and Nathan face a maximum of five years imprisonment for the conspiracy to commit bank fraud count conviction. Bank fraud carries a maximum sentence of thirty years imprisonment and a fine of $1 million. Conspiracy to commit money laundering or any of the four substantive money laundering courts each carries a maximum sentence of twenty years imprisonment and a fine of $500,000.
Sentencing is set for May 4, 2007, before United States District Judge Melinda Harmon.
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