Two Modesto residents, of Fijian nationality, have landed themselves prison sentences after being convicted of operating a fraudulent real estate scheme that cost lenders upwards of $3 million. The duo, Jyoteshna Karan, aged 52, and Praveen Singh, 45, were handed down sentences of over three years and two years respectively, as per the announcement by Acting United States Attorney Michele Beckwith.
The scam, which ran from 2006 through 2015, involved manipulating the real estate market through illegal straw purchases and lender-approved short sales of some 15 homes between Modesto and Sacramento. These types of transactions are intended to quickly, but not necessarily smoothly, transfer properties at below-mortgage-value in foreclosure situations. They are designed as a last resort to prevent total financial loss. However, in practice, Karan and Singh’s machinations, which played out over nearly a decade, twisted this fail-safe into a profit vehicle at lenders’ expense.
An investigation into their activities by the FBI, FDIC OIG, and the Stanislaus County District Attorney’s Office revealed a complex web of deceit. The convicted parties exploited the real estate industry’s protective practices by using straw purchasers, those buying on behalf of others, to sidestep restrictions and manipulated short sales to acquire homes. Not only were participants duped, but documents were also fabricated, including using Singh’s mother as a straw purchaser and falsifying employment documents to feign high salaries at shell companies, according to court records obtained by the Department of Justice…