A former Denver, Colo.-area real estate broker has been sentenced to seven years in federal prison after being found guilty in a scheme involving homes sold to "unsophisticated" buyers knowing little or no English using fraudulently obtained FHA-insured loans.

Arvin Stanley Weiss, 58, was also sentenced to pay restitution totaling approximately $853,000 to the Department of Housing and Urban Development, and $5,000 to two victim banks.

Weiss was sentenced Tuesday, after a jury convicted him in July of eight counts of mail fraud, five counts of wire fraud, and three counts of witness tampering. A co-defendant, Jesus Guevara, pled guilty to mail fraud, wire fraud and witness tampering, and awaits sentencing.

Prosecutors said Weiss was a licensed real estate broker who bought and sold properties as Reserve Capital Funds Inc. Between June 1998 and February 2002, he bought up dozens of single-family residences in the Denver area at low prices, reselling them at "substantially higher prices to unsophisticated low-income buyers," prosecutors said.

The buyers were Hispanics who knew little or no English, and many were living in the United States illegally, the U.S. Attorney’s Office for the District of Colorado said. They would provide their personal information directly to Weiss or Guevara, and Weiss would secretly provide funds for down payments and falsify numerous documents to support the borrowers’ applications to meet HUD’s underwriting requirements.

Operating under the names of Fairfax Homes Ltd., Fairfax Express Corporation or Fairfax, Weiss usually sold his properties for two or three times what Reserve Capital had recently paid for them, in some cases not disclosing the true purchase price until closing, prosecutors said.

When the scheme was uncovered and Weiss and Guevara were indicted, Reserve Capital Funds Inc. was said to have bought and sold about 300 properties in the metro Denver area, exposing FHA to up to $51 million in losses, HUD’s Office of Inspector General said in a 2005 report to Congress detailing numerous fraud schemes.

Prosecutors said Tuesday that the mortgage fraud scheme included 41 properties, and that "the risk of loss far exceeded the actual loss to HUD."


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