The lure of lower monthly payments and extra cash in pocket is apt to hook budget-minded homeowners.
That’s how Zak Khan, 44, of Fremont, posing as a mortgage broker and notary, finagled at least 12 Santa Cruz County homeowners into refinancing their homes with undisclosed fees and payments that could result in deficits at the end of the loan, authorities say.
Khan, whose real name is Altaf Shaikh, faced a preliminary hearing Monday in Santa Cruz County Superior Court, where he was accused of one count of burglary and grand theft in a Watsonville home-loan case. He was arrested in May, but posted bail and was released from jail.
He was re-arrested Thursday at his home in Fremont by inspectors from the Santa Cruz District Attorney’s Office after further investigations showed Khan’s dealings were more far-reaching.
He was booked into Alameda County Jail on $500,000 bail.
Khan now faces 44 counts of burglary, grand theft, impersonating a notary and offering false or forged documents, said Santa Cruz County prosecutor Bill Atkinson.
"That’s what this game was all about — getting people to refinance," Atkinson said. "He would tell people, ‘I can make your payments this amount,’ but he wasn’t telling them about the prepayment penalties, the higher margin and the bank’s rebate to Mr. Khan. And he forgot to tell them he wasn’t a licensed broker, and he wasn’t a notary. He never disclosed all that."
Khan’s deals came to light in May when a new Watsonville homeowner added up the costs on his final closing statement.
| When the total came up $7,600 short of what he had borrowed, the homeowner called the escrow company and was shown a copy of their closing statement that showed $7,600 was given to a telemarketing company owned by Khan called Bay Area Marketing. |
The homeowner called an attorney and police after discovering that the unexplained $7,600 paid to Bay Area Marketing had been whited out on his copy.
Khan denied owning the telemarketing company when confronted by Watsonville police, Atkinson said, adding that investigations later proved Khan’s ownership of the company.
Khan is also suspected of generating 117 additional fraudulent loans in Monterey, Santa Clara, San Joaquin and San Mateo counties between April 2004 and May, Atkinson said.
On average, Atkinson said, Khan and his company received $15,000 in fees and commissions on each of the loans generated in Santa Cruz County.
He operated through Secure Financial Inc., a Union City-based mortgage company. All the loans were funded by World Savings Bank, Atkinson said.
Khan is expected to be brought back to Santa Cruz County and arraigned on the other charges early next week, he said.
Anyone who has refinanced their home with Khan can call district attorney’s inspector Mike Lindsey at 454-3587.
Contact Shanna McCord at smccord@santacruzsentinel.com.
