FraudulentCharges.com

Developer faces bank fraud charges

One of the men recently seeking to place the largest development in Washington Township’s history on 32 Mile Road and M-53 is facing federal charges for bank fraud.

Mitchell “Ed” Karam, a Troy resident and active developer in Washington Township, has been charged in federal court with bank fraud, punishable by no more than 30 years in prison, for allegedly not repaying approximately $4 million in bank loans to the Macomb Community Banks on lots sold in the Crystal Creek North subdivision in Washington Township.

A Federal Bureau of Investigation affidavit states that Karam sold a total of 36 lots in the Crystal Creek subdivision without making the required $113,000 discharge payments to the Macomb Community Bank while providing the buyers with fraudulent warranty deeds.

According to the FBI, Karam is accused of misrepresenting the amount of lots being sold at Crystal Creek North to the bank - stating that the number was low because of a slowing economy - while he in fact sold more than 30 lots during a 4-year period.

According to FBI documents, Karam sold the lots, then provided the purchasers with false and fraudulent deeds that concealed the existence of the bank’s mortgage interest.

Crystal Creek North was developed starting in 2002 with Robert Shaya, his brother Shaun Shaya and their father Ezra Shaya acting as agents and incorporators, with Karam acting as the general contractor for approximately 95 percent of the project.

The FBI documents state that Karam told bank officials with Macomb Community Bank that he signed the deeds on lots that have been foreclosed upon, but added that it was the Shaya family, not himself, that handled the relationship with the bank.

The documents state that the bank official did not find Karam’s story truthful.

The FBI affidavit also states that it was not uncommon for Karam to write checks out of the Crystal Creek North account to unrelated projects or people.

Karam wrote several large checks to family and friends - including Ghazi “Gary” Manni, who is being charged along with Karam in federal court in a conspiracy to commit sports bribery - and to himself.

Karam, who was released on bond, awaits a preliminary examination at the United States District Court-Eastern District of Michigan in Detroit on June 26.

Washington Township Supervisor Dan O’Leary said the township is working to understand the current legal issues surrounding Karam, and how those issues will affect the township and its residents.

“I don’t know the truthfulness of the charges. That will have to be determined by the authorities. I am concerned that residents will be negatively impacted and it has come to my attention that there are homeowner’s associations that have unpaid water bills that they believe were being paid by Mr. Karam or his corporation,” said O’Leary. “Mr. Karam’s legal issues raise a number of questions for residents and the township alike, and we hope for a speedy resolution of his circumstances and an outcome that will leave residents unharmed by any of his alleged activities.”

Neither Karam nor his attorneys could be reached for comment.