Mahal Muhawieh, a 31-year-old who once flew high buying and selling real estate in the Mission District and elsewhere in San Francisco, went to jail Wednesday morning after violating one of the court’s stipulations, which were to avoid contact with investors and stop investing.
“If you think he is investing,” Judge Bernard Zimmerman warned his father, Talal, during the September 21 bond hearing, “you must be prepared to turn him in.”
It’s unclear if that’s what happened, but Muhawieh was called into court again Wednesday and the judge found that over the past week he had engaged in activities that violated his bond agreement. He is now being held while the court settles on a trial hearing.
At that hearing he must answer to the federal government for 12 counts of wire fraud. But it’s the personal aspect of the case that may ultimately haunt Muhawieh.
Of the 90 people who invested in his $25 million real estate scheme, almost all are members of a tight network of Bay Area families originally from Palestine. Muhawieh was one of their own, according to sources close to him.
Though many didn’t know him well, they invested their money largely on faith and the bond of their community. And now, with their money apparently gone, they’re outraged.
“He basically ruined everybody’s life,” said a partner of one of the victims, who asked to remain anonymous while the case is being heard. “A bunch of the older people — they’re embarrassed. They saved all this money and then this guy comes in and takes it. This guy’s like a snake, he’s just cold.”
View this case from a different angle, however — such as that of defense attorney Stuart Hanlon — and Muhawieh is just one of hundreds of real estate investors who lost everything when the seemingly bulletproof housing market turned to jello in 2006.
“He was trying to get money for everybody, to make investments that were going to make everybody rich,” Hanlon explained. “And it didn’t work. The market collapsed on housing. His family lost millions of dollars; he lost money. The question is going to be, was it criminal, or was it just the market collapsing?”
Because many of these victims live in the Mission District, the media has dubbed Muhawieh the Mission Madoff, after Ponzi mastermind Bernard Madoff, who is currently serving time after admitting to the country’s largest scam.
According to his indictment, Muhawieh is accused of intentionally defrauding investors between January 2006 and March 2009, using money from some investors to repay others.
After his arrest in mid-September, Muhawieh was released on a $375,000 secured bond and allowed to work in his father’s Mission District liquor store. The only stipulations were that he was restricted from investing and from any form of communication with those named on a “no-contact” list drawn up by the FBI and the prosecution — essentially a list of his investors.
Many of the 90 or so victims on the list share the same last name with two or three others on the list, and almost all names are of Middle Eastern origin.
A search of San Francisco property records reveals that Muhawieh bought or sold (in several cases as co-signer) more than 40 San Francisco properties in the last few years. The majority of these properties are located in the Haight Ashbury and Western Addition neighborhoods, with a handful in the Mission.
A 15-month FBI investigation led federal prosecutors to believe that Muhawieh supplied multiple deeds of trust for the properties, using them as collateral for his investors’ funds. He’s also accused of using this money for non-investment purposes, such as personal expenses and his own personal investments, including retail businesses in San Francisco.
According to the FBI, the investigation is representative of the work being done by the new Financial Fraud Enforcement Task Force, established November 2009 by President Barack Obama in the wake of the financial crisis. The task force combines close to two dozen federal enforcement and regulatory agencies, in addition to state and local partnerships.
Federal prosecutors say that they will soon be presenting “an extensive amount of material” to the court, which the defense is entitled to review before trial. Muhawieh’s attorney said the trial itself won’t take place “for at least six to eight months.”
If found guilty, Muhawieh faces a maximum penalty of 20 years in prison and a $250,000 fine for each of the 12 counts of wire fraud.
He’s still in jail apparently until his trial starts. this low life ruined so many people’s life. He deserves to rot in hell. That’s probably even too good for this selfish bastard.
Updates on this story???