Broker Convicted of Making False Statements to Banks

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Felicia Muhammad, a Lakewood real estate broker, was found guilty Friday of five felony charges for lying to banks that funded mortgages for three properties that later went into default.

According to a statement by the U.S. Attorney’s Office for the Central District of California, the illegal transactions caused about $662,000 in losses to the lenders.

Judge Michael W. Fitzgerald, who presided over the four-day trial, is scheduled to sentence Muhammad on June 6. She faces a possible maximum sentence of 10 years in federal prison.

Evidence at the trial showed that in the summer of 2008, Muhammad applied for loans totaling more than $1.1 million at U.S. Bank, Countrywide Bank, and First Horizon Home Loans (a subsidiary of First Tennessee Bank) to purchase condominium units in North Hollywood and Canoga Park. In each loan application and in two occupancy certifications, Muhammad stated that each condo would be her primary residence, even though she never intended to live in any of the condos.

Once the purchases were completed, the titles to the properties were transferred to a trust administered by Muhammad’s former landlord, who had asked her to purchase the properties with her good credit, according to the statement. In exchange for purchasing the properties, Muhammad received $18,000.

“It is sad that the government would give a free pass to the banks that destroyed our economy by handing out million-dollar mortgages without verifying any information,” said Joel Koury, Muhammad’s attorney, in response to her conviction.

“The only people who get prosecuted are those like my client, who was a struggling single mother paid a few thousand dollars to be a straw purchaser (and who was) duped into using her own credit to help someone else purchase property.”

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