Former Roseville developer sentenced to four-plus years in prison for $22-million fraud
SACRAMENTO — U.S. District Judge Garland E. Burrell Jr. sentenced Abolghasseni “Abe” Alizadeh, 59, of Granite Bay, June 1 to four years and eight months in prison, according to U.S. Attorney McGregor W. Scott. Alizadeh was also ordered to pay $15,879,945 in restitution to the victims of his crimes.
On Jan. 12, Alizadeh pleaded guilty to wire fraud, bank fraud and making false statements to a federally insured financial institution.
According to court documents, Alizadeh, a Sacramento-area commercial real estate developer, restauranteur and owner of Kobra Properties, came up with a scheme to fraudulently buy land that he planned to develop. Banks usually loan up to 60 to 65 percent of the loan-to-value ratio on undeveloped commercial property, according to Lauren Horwood of the Department of Justice in a news release June 1. The loan-to-value ratio is the comparison between the amount of the loan and the value of the property.
To circumvent the banks and fraudulently get a higher level of financing, Alizadeh submitted altered purchase contracts to the banks that greatly inflated the purported purchase price, according to the news release. The banks, which competed for Alizadeh’s business, were unaware that the purchase prices were inflated and sometimes loaned well in excess of the loan-to-value ratio. By concealing the true purchase price from the banks, Alizadeh received substantial amounts of cash at the close of escrow and avoided making the full down payment or, in some instances, any down payment, according to the release.
Alizadeh was assisted in this scheme by co-defendant Mary Sue Weaver, 64, currently of Scottsdale, Arizona and formerly of Lincoln, who was employed at a local title company. According to the plea agreement, Alizadeh would write checks for the down payment, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, the news release said, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not.
On April 29, 2005, Alizadeh submitted a fraudulent purchase contract to Central Pacific Bank, which induced the bank to lend him nearly $4 million for the purchase of 10.3 acres of property. This loan represented more than 96 percent loan-to-value ratio. On Oct. 21, 2005, Alizadeh received more than $22 million in funding and loans to purchase the Turtle Island property, when in actuality, the original purchase price was $10 million, according to the news release. In March 2006, Alizadeh falsely claimed to Bank of Sacramento that he was paying $36 per square foot for a piece of property where he intended to build a TGI Friday’s restaurant. In reality, the news release said, Alizadeh was paying only $21 per square foot. This resulted in a $650,000 inflation of the true purchase price. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of more than $22 million, according to the news release.
“The scope of the fraud is staggering,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “As a well-known real-estate developer, title companies and banks competed for Mr. Alizadeh’s business. He submitted altered purchase contracts that greatly inflated the purchase price. This scheme cost financial institutions over $22 million. While this sentence cannot reverse the damage caused by Alizadeh and his co-defendant, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
This case was investigated by the Federal Bureau of Investigation, the IRS Criminal Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorneys Michael D. Anderson and Heiko P. Coppola are prosecuting the case.
On Dec. 15, 2017, Weaver pleaded guilty to one count of wire fraud and one count of bank fraud and is scheduled for sentencing on June 22. She faces a maximum statutory penalty of 30 years in prison on each count and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.