Convicted Scammer Defrauded Homeowners of Over $5 Million

Strategic Insights -

Mohammed Zafaranchi, also known as "Mike Ferry," was convicted of leading a scheme that targeted distressed homeowners facing foreclosure. Operating a network of boiler-room-type call centers, Zafaranchi and his associates convinced over 1,000 homeowners to pay thousands of dollars for mortgage modifications that never materialized. The scheme, which began with the purchase of homeowner data, involved mailers touting government programs that would reduce mortgage debt by 30% and interest rates to 2%. However, in reality, the call centers were staffed by untrained workers who simply scanned financial records and sent them to banks, with the homeowners eventually losing their homes.

Key Takeaways:

  • Mohammed Zafaranchi, 43, was convicted of 12 federal charges, including conspiracy to commit wire fraud, wire fraud, money laundering, and obstruction of justice.
  • Over 1,000 distressed homeowners were targeted and convinced to pay $3,000 each for mortgage modifications that never materialized.
  • Zafaranchi's scheme involved purchasing homeowner data, sending solicitation mailers, and operating a network of call centers staffed by untrained workers.
  • The call centers simulated government programs, telling homeowners they were eligible for mortgage modifications that would reduce their debt by 30% and interest rates to 2%.
  • Assistant United States Attorney Lauren Watts Staniar stated in closing arguments that each stage of the script was designed to entice victims into the fraud and get them to pay the fee.
  • Zafaranchi laundered the funds through shell bank accounts and withdrew the proceeds in cash, for which he was convicted of money laundering.
  • Zafaranchi's two coconspirators, Mark Lezama and Josh Herrera, have already pleaded guilty and are scheduled for sentencing.
  • The case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Seth Wilkinson, Lauren Watts Staniar, and Dane A. Westermeyer.

Statistics:

  • Over $5 million was defrauded from homeowners.
  • 1,000+ distressed homeowners were targeted.
  • 12 federal charges were brought against Zafaranchi.
  • 2 coconspirators have already pleaded guilty.
  • 4 hours was the time it took for the jury to deliberate.
  • Up to 20 years is the maximum prison sentence Zafaranchi faces.

Sources:

  • The United States Attorney's Office for the Western District of Washington
  • Acting U.S. Attorney Teal Luthy Miller
  • Mohammed Zafaranchi
  • FBI
  • Federal Housing Finance Agency Office of Inspector General