Maher Talal Muhawieh, who is charged with 12 counts of wire fraud for allegedly coaxing millions of dollars from dozens of San Franciscans, appeared in federal court Tuesday to promise that he would not flee the country.
The 31-year-old real estate investor has pleaded not guilty to charges of defrauding up to 80 people — many from the Mission District — out of $25 million.
U.S. prosecutors described Muhawieh’s dealings as a massive Ponzi scheme. The media has dubbed him the Mission Madoff, in reference to Bernard Madoff, who pled guilty and is now serving time for defrauding clients of billions of dollars.
The indictment against Muhawieh alleges that between 2006 and 2009, the University of San Francisco graduate intentionally defrauded clients with promises of significant returns if they invested with him in San Francisco residential properties.
Instead, the document states, Muhawieh used the funds to “pay interest on loans from other lenders, for personal expenses, and to invest in retail businesses located in San Francisco.”
Each count of wire fraud carries a maximum sentence of 20 years.
In court Tuesday, a secured bond of $375,000, a GPS monitoring bracelet and a promise from Muhawieh’s father helped convince Judge Bernard Zimmerman that Muhawieh would stay put.
“If you think he is investing,” the judge warned his father, Talal, “you must be prepared to turn him in.”
Judge Zimmerman reminded Muhawieh that while the case is being heard, he is allowed to leave his home only to work in his father’s Mission District grocery store.
He also repeated an earlier warning that Muhawieh is to have absolutely no communication with his former investors. U.S. prosecutors have compiled an official “no-contact” list.
After the short bond hearing ended, a moment of courtroom drama ensued when a federal prosecutor raced back into the courtroom to alert the judge that Muhawieh had spoken with one of his investors in the hallway.
Judge Zimmerman ordered Muhawieh tracked down and returned to the courtroom, where he was quietly reprimanded by his defense attorney, Stuart Hanlon.
Muhawieh explained to the court that he had merely thanked the investor for showing up to support him — an investor who, according to Hanlon, “doesn’t think [Muhawieh] is such a bad guy.”
After sternly reiterating the no-contact rules, Judge Zimmerman closed the session for the second time.
“You’ve had the proverbial first bite out of the apple; you’re not going to have a second one,” he warned. “I could very easily lock you up.”
U.S. prosecutors declined a request for comment, noting that they are unable to discuss an ongoing case.
Muhawieh is scheduled to return to court September 29 for a trial hearing.
