Ayman Shahid, Mortgage Fraud Conspiracy, California 2023

Former President Of Bay Area Home Builder Pleads Guilty To Mortgage Fraud Conspiracy

SAN FRANCISCO – Ayman Shahid, the former president of Discovery Sales, Inc. (DSI), pleaded guilty in federal court in Oakland to conspiracy to commit bank fraud announced U.S. Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, Internal Revenue Service Criminal Investigation Acting Special Agent in Charge (IRS-CI) Thomas McMahon, and Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) Special Agent in Charge Leslie DeMarco.

Ayman Shahid, 39, of Danville, Calif., was the president of DSI, which was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co.

According to Shahid’s plea agreement unsealed today, DSI was created to sell new homes built by Discovery Builders, Inc. (“DBI”), Albert D. Seeno Construction Co., Inc. (“AD Seeno”), and other entities affiliated with Albert Seeno III and the Seeno family. The homes were built in developments throughout the East Bay Area, including in Contra Costa and Alameda Counties.

In connection with his plea agreement, Shahid admitted he conspired with others to fraudulently cause bank underwriters to approve mortgage loans for unqualified buyers during the height of the financial crisis.

From 2006 to 2008, when Shahid was DSI’s vice president, buyers with little or no money of their own were induced to purchase homes at prices that were inflated through the use of financial incentives.

Shahid’s plea agreement explained that it was important to the scheme to maintain inflated property values because if the home and property values dropped, the value of the collateral would drop and the line of credit would be put at risk.

Over 325 Seeno and Discovery homes sold during the period 2006 – 2008 involved the use of incentives, amounting to sales in excess of $200 million.

Shahid agreed that the losses that resulted from foreclosures or short sales on these homes were approximately $75 million; Fannie Mae and Freddie Mac, which purchased mortgage loans used to pay for Seeno and Discovery Homes, lost almost $3.5 million.

Ayman Shahid was charged in April 2023 and pleaded guilty on an unknown date in 2023.

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