On Friday, a federal grand jury in Brooklyn, New York indicted Edul Ahmad, a Guyanese businessman who was last month arrested in a $50 million mortgage-fraud scheme. Ahmad made an unsecured personal loan to Rep. Gregory Meeks (D-NY) that was repaid only after Meeks’ finances came under scrutiny by the FBI.
In January 2010, we exposed Meeks involvement in a charity called New Direction Local Development Corporation that raised money for Hurricane Katrina victims who never received it, among other questionable dealings. In March, we asked the House Ethics Committee to investigate Meeks for paying $830,000 for a newly built home in 2006 that was worth more than $1.2 million. Media coverage of these events apparently triggered the FBI inquiry.
On July 22, the FBI reportedly removed Ahmad in handcuffs from a Guyana-bound aircraft on the tarmac at JFK International Airport. According to an FBI press release, the scheme worked like this:
…the defendant submitted false loan applications and supporting documents to make borrowers of mortgage loans appear to be more creditworthy than they actually were. The defendant did that in order to profit from real estate commissions and loan fees generated by the transactions. Additionally, at the closings, Ahmad prepared and submitted documents that falsely misrepresented whether the borrowers actually made any payments to the sellers and understated the amounts of Ahmad’s real estate commissions and loan fees. In doing so, Ahmad prevented the financial institutions from discovering that his fees exceeded those permitted by the institutions. Many of the homes involved were ultimately lost in foreclosures because the borrowers could not afford to make their mortgage payments.
On August 5, the House Ethics Committee announced that it has accepted a recommendation by the Office of Congressional Ethics (OCE) to “further review an allegation that Representative (Gregory) Meeks failed to disclose a payment he received in 2007 in a timely manner.”
According to a report issued by OCE and released by Ethics Committee, Meeks “refused to cooperate with the OCE investigation.”
Hopefully, the Ethics Committee will not treat the Meeks case as a simple disclosure problem, but will consider the source of the loan. In particular, the Committee should seek to find out what Ahmad received from Meeks, if anything, in return for the “loan.”
House Minority Leader Nancy Pelosi (D-CA) has not commented on Meeks’ problems.