Eghbal

I. BACKGROUND

Throughout the 1990s, Eghbal and Trujillo purchased HUD-foreclosed homes and resold them for profit to buyers with mortgage secured loans insured by HUD.1 Eghbal and 1 The district court noted some confusion in the record over whether the loans were actually insured by “FHA,” which meant either the “Federal UNITED STATES v. EGHBAL 16057 Trujillo sold to buyers who lacked sufficient assets to cover the down payment on the properties, and provided the down payment for the buyers by depositing their own personal funds into escrow via cashiers’ checks.

HUD would not insure a loan for a home for which the down payment was paid by the seller. To that end, HUD required a seller of a home to sign a document called an Addendum to the HUD-1 Settlement Statement (Addendum). By signing the Addendum, the seller certified that he had not, and would not, pay the buyer for any part of the down pay- ment, nor did the seller have knowledge of any loans made to the buyer for purposes of financing the transaction other than those described in the sales contract. HUD would also not insure a loan without a validly signed Addendum. For each instance in which they…