Luxury Home Builder Pleads Guilty to Committing Mortgage Fraud

PHOENIX—Talal Ashek, 42, of Holland, pleaded guilty today to one count of conspiracy to submit false claims to a lending institution for his role in a mortgage fraud conspiracy. Sentencing will take place on October 17, 2011, before U.S. District Judge Neil V. Wake.

Ashek owned and operated Phillips Luxury Homes, L.L.C., an Arizona construction firm that specialized in building multi-million-dollar luxury homes in areas such as Paradise Valley and Fountain Hills, Ariz. Between 2006 and 2007, Ashek solicited investors to obtain loans from banks. The loans were to be used to purchase a lot by the investor and to pay Ashek to construct a luxury home on the lot. Ashek and the investor agreed that they would share the profits after the luxury home was completed and sold. The majority of the investors solicited by Ashek were financially unqualified to obtain the multi-million dollar loans needed for the lot purchase and home construction.

Ashek fraudulently assisted the investors to qualify for the loans by depositing, or causing the deposit, of monetary funds into the investors’ bank accounts. After the investor received Ashek’s deposit, they then signed loan applications which falsely represented that they owned a significant amount of monetary assets. After the loan applications were submitted to the bank, the investor returned the deposit money to Ashek.

A conviction for this conspiracy charge carries a maximum penalty of five years in federal prison, a $250,000 fine, or both. In determining the sentence, Judge Wake will consult the U.S. Sentencing Guidelines, which provide advisory sentencing ranges. The judge is not bound by those guidelines in determining a sentence.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Raymond K. Woo, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER: CR-11-0975-PHX-NVW
RELEASE NUMBER: 2011-169(Ashek)