U.S. Justice Department Files Securities Fraud Lawsuit Against San Francisco Man for Perpetrating a Ponzi Scheme

The U.S. Attorney’s office has charged a San Francisco man with securities fraud for perpetrating a Ponzi scheme that allegedly collected more than $25 million from 80 investors. Maher Talal Muhawieh was charged with obtaining loans from victims which he claimed would be used to renovate residential properties that would later be sold at a profit. Muhawieh told victims that the loans paid a high rate of return, had limited risk and were secured by deeds of trust. According to the indictment, Muhawieh operated a Ponzi scheme in which he misappropriated funds for his own personal and used borrowed funds to reimburse earlier investors.

In testimony before the U.S. Senate last week, an FBI official reported that securities fraud involving high yield investment products was on the rise. According to the FBI, this year 291 new high yield investment fraud cases have already been opened. See related blog posting: FBI Reports 105% Increase in High Yield Investment Fraud Investigations