Serving Beverly Hills, Bel Air, Holmby, Century City, Trousdale, Brentwood, Westwood

Babijian Pleads Guilty To A Misdemeanor

After local realtor Joseph Babijian was acquitted in August of 13 criminal charges, with the jury left unable to reach a verdict on eight additional counts on his part in a $40 million mortgage fraud scheme, the 56-year-old Beverly Hills resident pleaded guilty to a misdemeanor earlier this month.

Babijian pleaded guilty to one count of collecting unearned fees in real estate transactions. He will pay a $10,000 fine and $35,000 in restitution. He will serve no time in prison. The plea agreement also specified the U.S. government would not sue Babijian in a civil court.

“We’re very pleased with the result,” said his attorney Thomas Mesereau. “He has been exonerated of every allegation involving fraud, conspiracy and money laundering.”

Babijian’s colleagues, Kyle Grasso and Lila Rizk, were not so lucky. Both face jail time after a jury convicted them of conspiracy, bank fraud and numerous loan fraud charges for their roles in the mortgage fraud scheme last August—as reported in the Aug. 14 edition of The Courier.

The wide-ranging and sophisticated scheme defrauded mortgage lenders by obtaining inflated mortgage loans on expensive homes in some of California’s most expensive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, La Jolla and Pebble Beach.

Members of the conspiracy sent false documents, including bogus purchase contracts and appraisals, to the victim banks to deceive them into unwittingly funding mortgage loans that were hundreds of thousands of dollars higher than the homes actually cost.

Lehman Brothers Bank alone was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.

The evidence at the August trial included proof that Grasso and  Rizk profited by collecting hundreds of thousands of dollars in commissions and concealed payments.

Their sentences are scheduled for Jan. 29.

Eight other real estate professionals who were part of the scheme previously pleaded guilty.

Babijian’s sentencing is scheduled for Feb. 22.

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