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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 20, 2012

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A former Virginian loan officer was sentenced to four years in prison for his role in fraudulent mortgage loan transactions.

Pervaiz Arshad, 58, of Annandale, VA., ran a fraud scheme which involved nine homes in northern Virginia. He took upwards of $1.7 million, and attempted to obtain a fraudulent passport for a co-conspirator to flee Canada.

In addition to his prison time, Arshad was sentenced to three years of supervised release, ordered to pay restitution to the victims, and forfeit all proceeds from his ventures.

Court documents state that Arshad was a mortgage loan officer for Annandale-based E-Star Lending. He recruited a person to act as a “straw buyer” and assist with fraudulent real estate transactions meant to profit Arshad. The properties were sold to the straw buyer at a profit. Arshad ensured the straw buyer they would qualify for full financing used to buy the properties by reporting false income information and employment on the mortgage loan applications. Conspirators then erected fake companies to verify the false information. No payments were made on the loans, and Arshad planned for the straw buyers to travel to Canada before the mortgage loan fraud was discovered.  

After fleeing to Pakistan in 2010, Arshad was indicted for the case. Officials arrested him two years later, in July 2012, when he was discovered on a flight into Dulles International Airport. He was the sixth person associated with E-Star Lending to be convicted of mortgage loan fraud. Arshad pleaded guilty to conspiracy and passport fraud charges on Aug. 22, 2012.

Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Services, Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement. Arshad was sentenced by United States District Judge T. S. Ellis III.

The case was investigated by the FBI’s Washington Field Office and the U.S. Postal Service. Paul J. Nathanson, Assistant United States Attorney, is prosecuting the case on behalf of the United States.