On the surface, it looks likes one of those too-good-to-be-true businesses, plucked straight from a late-night television infomercial. You buy foreclosed homes and turn them around in a short time for a big profit. “It’s the American dream,” notes Scott Smith, a Staff Writer who covers the courts, crime and high seas rafters for Stockton, California’s The Record.

And in the case of Stockton’s own Iftikhar Ahmad — who was arrested by federal agents earlier this month and arraigned on seven charges of identity theft, mail fraud and illegally sending money out of the country, only to be freed on a $1 million property bond — Smith tells us how federal agents suspect it’s all too good to be true.

From this past weekend’s online edition of The Record:

FBI details housing fraud case
Stockton man awaits a court hearing Thursday

By Scott Smith
Record Staff Writer

Ahmad is accused of spearheading a ring using his company I&R Investment Properties to illegally “flip” more than 100 homes, allowing him to reap millions of dollars along the way. Flipping property, or buying a home to fix it up and sell it at a profit, is not a crime, but authorities say Ahmad broke the law the way he did it.

So far, Ahmad, 36, and two others have been arrested and charged in a Sacramento federal court based on a 140-page FBI affidavit that implicates a dozen others, including Ahmad’s three brothers and those who appraised, notarized and serviced the escrows for the properties.

The one common thread in all the deals was Ahmad who bought up Stockton homes in foreclosure - often paying cash - and sold them at inflated prices to “straw buyers,” or fake buyers, created with the help of stolen identities or fake documents, the affidavit said.

Ahmad supposedly sold the homes to some of those named in the affidavit who obtained subprime loans using the false identities. That allowed them to put little or nothing down to start. Most of the homes went into foreclosure within months when nobody made the loan payments, the affidavit says.

Ahmad amassed $8.6 million in the past decade, and sent $484,000 to his native Pakistan without reporting it, according to federal agents, who were tipped off when a Sacramento-area woman reported she was a victim of identity theft.

“I still want to know, ‘How did I get involved?’” said Rebecca Wood, a senior legislative assistant for state Assemblyman Greg Aghazarian of Stockton.

Wood said she never bought property in Stockton and does not recall ever meeting Ahmad. But one day nearly four years ago, stern creditors started calling to tell her she was not making her house payments. Wood called police.

“I had visions of me in a jail cell,” she said, describing the panic she felt at first. “Seriously.”

The FBI and Internal Revenue Service turned their attention to Ahmad, digging papers from his curbside trash, going undercover to inquire about the sale of the El Camino Motel on Mariposa Road owned by one of Ahmad’s brothers, and pouring through 100 mortgage deals.

For more on this developing story, including a list of illegal house flipping red flags to be on the lookout for, read “FBI details housing fraud case.”