Three men charged in Islamic-based Ponzi scheme

By Wailin Wong
Posted Nov. 17, 2010 at 10:11 a.m.

Three owners of a Chicago-based real estate development firm have been charged with fraud for allegedly cheating investors out of $43 million while claiming to be compliant with Islamic law.

A federal grand jury returned a 14-count indictment against the owners of Sunrise Equities on Tuesday, U.S. Attorney Patrick Fitzgerald said in a Wednesday statement. Federal officials said Salman Ibrahim, the majority owner and president of the now-bankrupt firm, and Mohammad Akbar Zahid, senior vice president of investor relations and a 10-percent owner, told clients that their investments would comply with Shariah law.

Islamic law prohibits interest, so Ibrahim and Zahid told investors they would receive monthly pay-outs of profits from real estate development. According to Fitzgerald’s office, the men promised annual returns of between 15 and 30 percent.

Federal officials said the three owners actually operated a Ponzi scheme between January 2003 and September 2008, selling promissory notes and using the proceeds to make fake profit payments to earlier investors. The men are accused of cheating hundreds of individual investors as well as making false statements to get loans from Mutual Bank, Cole Taylor Bank and Devon Bank. They allegedly misused investors’ funds, operating projects unrelated to real estate that were not disclosed to clients, and spending money on themselves.

Robert Grant, special agent-in-charge of the Federal Bureau of Investigation’s Chicago office, said this case marks the first time in the city “that an alleged fraud scheme has been uncovered that used a pillar of Islam” as a lure.

“A key element in securing the charges was the extraordinary cooperation provided by members of Chicago’s Pakistani community, who were the primary victims of this alleged fraud scheme,” Grant said in a statement.

Federal officials said 37-year-old Ibrahim, a Pakistani national, and 59-year-old Zahid, a U.S. citizen, are believed to have left the country after Sunrise went into bankruptcy. Their whereabouts are unknown. The third owner, 47-year-old Amjed Mahmood of Des Plaines, will be arraigned at a later date. Mahmood was a 10-percent owner and senior vice president of Sunrise.

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  1. grizzled Nov. 17, 2010 at 10:42 a.m.

    Well, Sharia law would require that the perps hands be cut off.

  2. Mary Vol Nov. 17, 2010 at 10:59 a.m.

    They took in $43 million. $42 million to Al-Quaeda?

  3. Chicago Nick Nov. 17, 2010 at 11:04 a.m.

    Mary you’re absolutely right.

    That’s a lot of money from just a couple Muslims in Chicago alone. They’re poising themselves for a complete takeover of the country if Americans don’t wake up today. Stop feeding the foreign oil beast and drill at home ON LAND not 10 miles deep in the oceans.

    It won’t be tomorrow but our kids kids will be kneeling towards Mecca if nothing is done. Islam is not the friend of the west. Wake the ^&*( up America. Look to Dearbornistan and Now they’re taking over Detroit, soon it’ll be Michighanistan sooner than later.

  4. tester Nov. 17, 2010 at 11:31 a.m.

    @Chicago Nick,

    You’re delusional for believing that.

  5. JD1776 Nov. 17, 2010 at 11:34 a.m.

    Chicago Nick: If they want Detroit let em’ have that s*** pile!

  6. Sam Nov. 17, 2010 at 11:52 a.m.

    dont associate anything with islam with terrorism. These are just some people taking advantage of a religion for personal profit. No different than Christians cheating a church, or what Bernie Madoff did with Jews. People tend to trust those of their faith and then get taking advantage of! Worry about the fraud that is taking out our economy

  7. Griff Nov. 17, 2010 at 12:03 pm

    Wait a minute, isn’t that consistent WITH Islamic law. Doesn’t their “Religion” permit them to lie, cheat, and commit fraud, as long as the victim isn’t of their faith?

  8. Joe Blow Nov. 17, 2010 at 12:06 pm

    bilking Muslims??? great news.. .keep up the great work!

  9. Stephanie Nov. 17, 2010 at 1:17 pm

    They defrauded the banks. I’m sure the banks were trying to be oh-so-multi-cultural and tolerant and got shafted! Serves ‘em right.

  10. ff Nov. 17, 2010 at 2:26 pm

    Chicago Nick, While you might be right, what is the difference of that cultural take over you mention and the one your ancestors perpetrated on the American Indians?

  11. ff Nov. 17, 2010 at 2:30 pm

    Southern Evangelical Ministers, you name them, Robbed people of millions of dollars in the 80s and 90s…. I didn’t see people criticizing them as they criticize the Muslims in the story based on religious grounds!

  12. Mike Nov. 17, 2010 at 2:48 pm

    Out of 11 comments so far, Sam is the only one to make sense. The other 10 beat their favorite dead horses. That’s about par for the course.

  13. Centurion Nov. 17, 2010 at 3:04 pm

    Hey FF…those southern evangelicals…who bilked the billions of dollars….went to jail…..and some are still in jail…others have died while in jail……..THE MUSLIMS should also be sent to jail….uh, without their hands of course….we have to be sensitive to Muslim Law…so….lets cut off their hands…lets not offend Allah…lets keep the Muslim tradition of Sharia..and cut off their hands.

  14. Abdul Nov. 17, 2010 at 3:56 pm

    Or we could cut off Centurion’s hands, preventing him from posting infantile comments.

  15. Bob Nov. 17, 2010 at 4:08 pm

    this horrible muslim law should be prohibited. It is money laundering for terrorists. Peaceful islam exists only in a mind of this delusional president, until they blow up planes or shot ina back of american soldiers. We know exactly what kind of folks they are

  16. ems Nov. 17, 2010 at 4:19 pm

    All of the above, Arrogance, Ignorance, coupled with Intolerance for other equals BIGOTRY!!

  17. Cynic Nov. 17, 2010 at 4:20 pm

    This crime is not based on the muslim religion. It is about greedy opportunitists and the two-dimensional victims who actually believe in a guaranteed 15-30% return on investment per year.

    The logical fallacy is that investment is too good to be true. On the same note, there is a logical fallacy in demonizing an entire religion. Neither situation requires thought or deliberation. It’s a guttural reaction based not on logic but greed, fear. It’s brainstem response rather than higher cortical thinking.

    It stands to reason that the same two-dimensional people who post illogical rants against muslims taking over the US are likely to get taken in a Ponzi scheme in the future. Food for thought, ranters!

  18. Bob Nov. 17, 2010 at 4:25 pm

    Aha, we all people of America are ignorant bigots, because we do allow to tolerant and well informed muslim terrorist “equals” shoot in a back of our people, kill them by thousands and now launder their money here…

  19. Cool Nov. 17, 2010 at 4:35 pm

    It actually was very smart, to claim a compliance with this laughable law. Since most people wouldn’t check on it anyway (or have no idea of it ;-) ), I guess it could be run forever if they would be out of business. ;-) Funny

  20. Mike L Nov. 17, 2010 at 4:51 pm

    Only the US government is allowed to run ponzi scheme’s. All other crooks will be prosecuted by the mob bosses in Washington.

  21. Jim Nov. 17, 2010 at 4:53 pm

    I like Stephanie’s comment….it’s true!

  22. Avi Nov. 17, 2010 at 9:40 pm

    I have Jewish friends that got duped by their Jewish Brother , “Bernie the Crook Madoff. Seems like scammers will always live. Maybe we should start chopping hands off so people will get the point and learn their lesson. If thieves were wandering town missing a hand, I’m sure the young will fear stealing in the future. I’m not a thief and I raised my family not to be so we have nothing to worry about. Only the criminals should walk in fear

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  24. Honest Broker Nov. 18, 2010 at 10:23 a.m.

    Every cultural community has bad apples and scam artists. This article is evidence of that. I don’t think there’s any other lesson to be taken from this article.