Local Business Owner Indicted in Alleged Ponzi Scheme

A Skokie man who owns Devon Street Investments Ltd. is one of four individuals charged with wire fraud and mail fraud in a 14-count indictment that resulted from an alleged Ponzi-scheme that involved selling $2.9 million in phony mortgages to investors.

Albert Rossini, 67 was charged with 11 counts of wire fraud and three counts of mail fraud in the indictment that was filed last week and unsealed Tuesday, according to the United States Attorney’s Office Northern District of Illinois. Rossini is accused of conspiring with Babajan Khoshabe, 74 of Chicago and Khoshabe’s son, Anthony Khoshabe, 33 of Skokie to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment.

“The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process,” the indictment states.

But the three did not own the mortgage notes and used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest. The scheme is alleged to have begun in 2011.

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Babajan Khoshabe was charged with eight counts of wire fraud and three counts of mail fraud, his son with five counts of wire fraud and three counts of mail fraud.

“Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments,” according to the U.S. Attorney’s Office. “Anthony Khoshabe would purportedly collect monthly rents from the buildings’ occupants and turn them over to investors. What the defendants failed to reveal is that Reliant Management did not manage the properties, and Anthony Khoshabe had no legal ability to collect the rents, the indictment states. The periodic payments made to investors were actually derived from funds that other investors had pledged into the scheme.”

Thomas Murphy, 61, an Illinois Attorney who is alleged to have “claimed to validate the sale of the mortgage notes through a phony “Guaranty Agreement,”” was also indicted.

The wire and mail fraud counts carry a maximum penalty of 20 years in prison and a $250,000 fine, plus mandatory restitution.