Opinion ID: 2791321
Heading Depth: 2
Heading Rank: 1

Heading: Fifth/Third Bank Frauds (Counts 1-3)

Text: Fifth/Third prohibited payment of broker’s fees from loan proceeds. To circumvent this prohibition, Nazzal regularly bribed loan officer (and testifying co-defendant) Eric Morton to approve loans for unqualified borrowers. In these “straw buyer” transactions, Nazzal would then submit fraudulent payoff letters for mortgages and pre-existing liens—when none existed—so that he or one of his companies1 could obtain payments at the respective closings. Only some of these transactions were presented at trial as examples. Those relevant to this appeal are discussed below and referenced by street address.
In this straw buyer transaction, Nazzal engineered a loan for Mountif Zeaiter, a sporadically employed and otherwise unqualified borrower. In order to get Fifth/Third’s 1 Nazzal typically did business with Fifth/Third through several entities, including G&S Development and Alter Investments. At different times, both Nazzal and Schneider claimed to be the Treasurer of G&S. Schneider also signed documents as the Treasurer of Alter Investments. -2- Case Nos. 13-2612 / 13-2628 United States v. Nazzal / Schneider approval for this $345,000 loan, Nazzal gave Morton false tax returns greatly inflating Zeaiter’s income. Schneider prepared the paperwork and was present at the meeting when Zeaiter signed the documents. Schneider also prepared a purchase agreement (that was faxed from his law office) falsely stating that Zeaiter had given the seller $5,000 in earnest money. Schneider was also present at the loan closing. Although the documents required Zeaiter to pay approximately $18,000 at closing, he later testified that he never paid anything. Nazzal also submitted a fraudulent payoff letter for $12,000—in reality just a disguised fee for his brokering the loan. After the closing, Nazzal paid Schneider with a $500 cashier’s check and gave Morton $3,500 cash.
Nazzal again brought a straw buyer to Morton and again obtained a “brokerage” fee at closing in violation of Fifth/Third policy. The closing on this $320,000 loan took place at Minnesota Title Agency, whose president (and co-defendant) Ross Carey later testified that Schneider was associated “whenever there was a closing involving [Nazzal].” In this deal, Schneider served as a “witness” on the purchase agreement, which falsely indicated that the borrower was making a $100,000 down payment on the property. Nazzal obtained nearly $15,000 at the closing.
Nazzal directed Morton to falsify the borrowers’ financial statements for a $612,000 commercial loan secured by the 9701 property. Schneider signed a fraudulent payoff letter as the “Treasurer” of Alter Investments, falsely stating that the company had a prior mortgage on the property. This letter was faxed from Schneider’s law office. At the closing, Fifth/Third paid -3- Case Nos. 13-2612 / 13-2628 United States v. Nazzal / Schneider Alter Investments $22,000 to clear title and Schneider received $2,588 in attorney’s fees. Nazzal also paid Morton over $1,000 for assisting with this transaction. For a $550,000 loan on the 9700 property, Nazzal provided another fraudulent payoff letter for $48,000—again, where no prior lien existed. The transaction resulted in a payment of nearly $28,000 to G&S Development with an additional payment of $500 to Schneider.
Two brothers had fallen behind on a construction loan for a gas station. During court proceedings, they happened to meet Nazzal and Schneider, who were at the courthouse that day on another matter. The brothers eventually obtained alternate financing from Nazzal. When this loan came due, they planned to sell their gas station and pay Nazzal with the proceeds. After the sale fell through, one owner agreed to buy the property from his brother so that Nazzal would get paid out on time. This last-minute deal also required an emergency payment to Morton, who had spent considerable time getting his superiors at Fifth/Third to approve the transaction. In advance of the closing, Schneider gave Morton a $1,000 check drawn from his law firm’s trust account. Morton falsely wrote “payback previous personal loan” in the memo line of the check. He later testified unequivocally that he received this payment as a bribe. The brothers and Nazzal disputed various payoffs and fees prior to closing. Schneider signed one fraudulent payoff letter for $549,000 as the “Treasurer” of G&S Development. The parties also disputed payment of $1,750 in purported “attorney’s fees” to Schneider. Both brothers later testified that they “never hired” Schneider for the closing; they believed he represented Nazzal. -4- Case Nos. 13-2612 / 13-2628 United States v. Nazzal / Schneider