CONCORD (CBS SF) — An executive of a Concord real estate company pleaded guilty to a $200 million mortgage fraud scheme that took place during the height of the housing crisis, according to an unsealed plea agreement.

Ayman Shahid, 39, of Danville, was the president of Discovery Sales Inc., a company Albert Seeno III created to market homes built by other companies that he had founded, including Discovery Builders, Inc. and the Albert D. Seeno Construction Co., Inc., among others.

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In the plea agreement, Shahid confessed to being part of a scheme that caused banks to approve mortgage loans for unqualified buyers on the basis of false and misleading applications for homes with inflated prices.

Between 2006 and 2008, over 325 homes were built under the scheme, amounting to sales in excess of $200 million, prosecutors said.

Foreclosures and short sales from the homes amounted to approximately $75 million in losses, according to prosecutors. Fannie Mae and Freddie Mac, which purchased mortgage loans used to pay for the homes, lost roughly $3.5 million.

U.S. Attorney Melinda Haag said in a statement that Shahid and his coconspirators were responsible for saddling the banking system with dozens of fraudulent mortgage loans without regard for the damage those loans would cause to individual home buyers, investors and the economy as a whole.

“Shahid fraudulently inflated the price of homes purchased by individuals who were unable to pay their mortgages in the long run,” Haag said. “By doing this to serve their own narrow economic interests, Shahid, and actors like him, contributed to the housing bubble.”

Under the plea agreement, Shahid admitted to directing employees to offer significant cash offers and other incentives to new home buyers in an effort to drive up the price of the homes.

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In some cases the homes were worth less than the loan amounts, according to court documents. Prosecutors alleged that Discovery Sales made little or no effort to determine the true value of the homes.

To hide the incentives, Discovery Sales worked with Wells Fargo and J.P. Morgan Chase, which prosecutors described as “preferred lenders,” who knew that the incentives were not being disclosed in loan files, prosecutors said.

When those lenders were not involved, Shahid and his employees took pains to hide the amount of cash being offered so that lenders would approve the buyers’ loans, despite the fact that they had little money of their own, according to court documents.

The inflated prices allowed Seeno’s construction companies to secure credit based on the inflated value of the homes, which were being used to finance property acquisitions or to build new homes, according to court documents.

Shahid is now facing 30 years in prison, a $1 million fine or twice the gain or loss of the scheme, and restitution to be decided by the court.

He is next due in court on Dec. 10 for a status hearing.

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