April 3, 2025 – FRESNO, CA – Jyoteshna Karan, 52, and Praveen Singh, 45, both of Modesto, were sentenced for leading a multi-
million-dollar mortgage fraud scheme, Acting United States Attorney Michele Beckwith announced on Tuesday. Karan received three years and four months in prison, and Singh received two years.
According to court records, from 2006 through 2015, Karan and Singh conspired to make straw purchases and short sales of approximately 15 homes from Modesto to Sacramento. A straw purchase is where one person buys a home on behalf of another person to get around certain restrictions. Straw purchases are generally illegal in the real estate industry because they compromise lenders’ risk management practices. A short sale is where a homeowner sells their home for less than the amount they owe on their mortgage, with lender approval, to avoid foreclosure. Short sales must generally be arm’s length transactions in the real estate industry because that helps protect buyers and sellers from undervaluation, overpayment, and bias.
After Karan and Singh acquired the homes, they allowed them to go into foreclosure and arranged for short sales with the lenders. They then quickly resold, or flipped, the homes to other people at market rates and therefore reaped significant profits. In doing so, they caused the lenders to suffer over $3,000,000 in losses.
Karan and Singh were experienced real estate professionals who used unwitting participants, fabricated documents, and shell companies to carry out their fraud. For example, they used Singh’s mother as one of the straw purchasers, fabricated documents to make it appear as though the straw purchasers worked for their shell companies making six figure salaries, and fabricated documents to make it appear as though the transactions were arm’s length. This was all done to convince the lenders to go through with the deals.
This case is the product of an investigation by the FBI, FDIC OIG, and the Stanislaus County District Attorney’s Office. Assistant United States Attorney Joseph Barton prosecuted the case.
Source: DOJ Release
