Danny Zhao, Conspiracy to Commit Bank Fraud, Virginia 2015

Ashburn businessman Danny Zhao, 36, pleaded guilty to conspiracy to commit bank fraud, a crime that netted nearly $1 million in losses for mortgage lenders. According to court documents, Zhao acted as a realtor in fraudulent real estate short sale transactions involving Legacy Investment Group, a company owned by his wife.

Zhao fraudulently induced mortgage lenders to approve sales of property for amounts less than what was owed. To do so, he forged the signatures and initials of homeowners in mortgage documents. He also sent false hardship letters and financial statements to lenders, failing to disclose his relationship to the owner of Legacy Investment Group and making misleading representations about the short sales being arm’s length transactions.

Zhao participated in six fraudulent short sale transactions, resulting in mortgage lenders’ losses of approximately $924,529. Zhao and his family profited approximately $200,000, a staggering gain from their deceitful actions.

The FBI’s Washington Field Office investigated the case, with Assistant United States Attorney Uzo Asonye prosecuting the case. U.S. District Judge Leonie M. Brinkema accepted Zhao’s guilty plea.

As a result of his guilty plea, Zhao faces a maximum period of five years of imprisonment. His sentencing is scheduled for May 15, 2015. The maximum statutory sentence is prescribed by Congress and is provided for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Zhao’s actions demonstrate the devastating consequences of mortgage fraud. His conviction serves as a reminder of the importance of holding individuals accountable for their crimes. The Grimy Times will continue to monitor this case and provide updates as more information becomes available.

Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15CR51.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

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