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Friday, August 31, 2012

Bay Area Men to Serve Time for Money Laundering and Bank Fraud

Posted By on Fri, Aug 31, 2012 at 9:45 AM

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Denizens of San Francisco -- especially those who frequent pot clubs -- might be a bit miffed with U.S. Attorney Melinda Haag. And despite how much you might love marijuana, perhaps you can still give credit where it's due.

Haag handed down sort-of stiff sentences to Michael Ohayon, 44, and David Papera, 50, who received 60 and 70 months in prison, respectively, for conspiracy to commit bank fraud and money laundering. They were also ordered to pay some $10.5 million in restitution, prosecutors said. 

Needless to say, it wasn't a difficult fight for the prosecution. Ohayon pleaded guilty to conspiracy to commit bank fraud and money laundering in May, and Papera pleaded guilty to conspiracy to commit bank fraud and money laundering in April.

Together, these guys created Sage Creek Ranch, LLC, to develop property in Napa County. According to a plea agreement, they milked Washington Mutual for $19.67 million in loans by submitting fraudulent loan applications under the names of people with good credit scores.

The applications said these people would purchase land from Sage Creek Ranch, but wouldn't make any payment on the property.

But that's not all.

Papera used more than $1.25 million from the loans to pay off his own personal debt on a separately owned property.

Six of the so-called land-purchasers also got in trouble with the law. They pleaded guilty to tax felonies, and received a hefty $50,000 bribe from Ohayon and Papera for allowing the white-collar crooks to use their names, and failing to include the money in their income reports.

Ohayon and Papera were also sentenced to five years of supervision upon release. Ohayon will begin serving time in January 2013, and Papera will start this November. 

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Suzanne Stathatos


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