The latest in a line of religious frauds after an Orthodox Jewish
group and a Christian one swindled fellow religionists of their money.
Mehul Kamdar
http://ap.google.com/article/ALeqM5gZa_SJTeR0-
XFwm0mhUk4hPcxjBgD93F7IMO0
Chicago Muslims devastated by investment scam
By RUPA SHENOY – 22 hours ago
CHICAGO (AP) — Between the prayers that fill the holy month of
Ramadan, during the long fasts that stretch from dawn to dusk,
Muslims have been meeting to discuss the disappearance of Salman
Ibrahim.
The respected businessman persuaded up to 200 Pakistani and Indian
immigrants to contribute their savings and mortgage their homes to
finance real estate deals.
But Ibrahim vanished in August, leaving his investors with losses
that could total $50 million — in some cases their life's savings.
"The scale of impact that this stands to have on a lot of people in
the South Asian and Muslim communities is potentially very drastic,"
said attorney Salman Azam, who filed a petition last week to force
Ibrahim's company, Sunrise Equities Inc., into bankruptcy. "There are
a lot of very, very sad stories and dire financial situations."
But it's the loss of trust that has really shaken people along Devon
Avenue on Chicago's North Side, home to one of North America's
largest South Asian communities.
Ibrahim lived in the neighborhood lined with South Asian groceries
and businesses — where men wear knee-length shirts and caps, most
women cover their heads and Hindi and Urdu are spoken as often as
English. He wore a beard and traditional dress, and attended the
local Jame Masjid mosque.
"Everyone here knows him," Ali Akbar said from behind the counter of
his convenience store. "He was a very pious man."
Perhaps most significant to investors: Ibrahim was a member of the
Shariah Board of America, a Devon-based group of Islamic clerics who
advise Muslim investors. The board certified Sunrise as conforming to
an Islamic law, or Shariah, that prohibits Muslims from earning
interest on investments.
Instead of interest, Sunrise Equities paid dividends in lump sums.
The firm was founded in 2001 and developed, managed and sold
properties throughout Chicago. Its projects included an unfinished 12-
story West Loop condominium building and a 52-unit, mixed-use
building under construction on the near west side.
Fazal Mahmood, an engineer from suburban Des Plaines, invested
$50,000 around 2004 after a friend on Devon Avenue told him Ibrahim
was an upstanding community member whose investments made good
profits. Mahmood, a 52-year-old Pakistani immigrant, met Ibrahim and
liked him.
"He seemed like a good, dependable man," said Mahmood, who wanted to
earn money for his two daughters' tuition to private colleges.
For three years he received an 18 percent return, as Ibrahim had
promised. Last year, Ibrahim persuaded him to borrow $200,000 against
his home, Mahmood said. In return, Ibrahim gave Mahmood an unsecured
promissory note, which Sunrise was not licensed to issue.
An unsecured note serves as proof of an investment but doesn't
provide collateral, so investors had no recourse after Ibrahim
disappeared, said Azam, the investors' attorney.
During a meeting in August, Ibrahim told about 50 investors,
including Mahmood, that banks were demanding $1 million more from
him. The investors decided to chip in and help Ibrahim, Mahmood said.
A few weeks later, Mahmood learned that Ibrahim had disappeared.
"You trust your fellow man and then he does such a thing," said
Mahmood. "It's disturbing."
He will now have to work two jobs to keep his daughters in school.
Many believe Ibrahim and his family have returned to his native
Pakistan.
Sunrise's Devon Avenue offices are closed. The director of the
Illinois Securities Department said the company doesn't have a
lawyer. No one responded to a telephone message left by The
Associated Press at Ibrahim's last known residence or at the home of
Sunrise's senior vice president, Amjed Mahmood. No phone number could
be located for senior vice president Mohammad Akbar Zahid.
The state Securities Department took steps Wednesday to safeguard
investors' money by suspending Sunrise's rights to buy and sell
assets. Director Tanya Solov said her office may work with Attorney
General Lisa Madigan or the U.S. Attorneys' office to pursue criminal
charges against Ibrahim or Sunrise.
If Ibrahim did make off with investors' money, he wouldn't be the
first to take advantage of religious ties.
Among recent cases: Last month, the federal Security and Exchange
Commission sued owners of a Chicago-based real estate firm for
allegedly misappropriating $255 million from about 1,200 investors,
many of them Orthodox Jews. In June, a man backed by bishops of The
Church of Jesus Christ of Latter-day Saints was jailed for stealing
as much as $180 million from its members.
Such cases are known as "affinity fraud," where someone uses a
position in a religious community to build faith with investors,
Solov said.
"The victims have something in common with the perpetrators so
there's tremendous trust," she said. "We don't get notified until
they don't get paid, the offices are shut down and the perpetrators
can't be located."
However, many still have faith in Ibrahim, who they said put himself
through college in the 1990s by working long hours driving a taxi.
Ibrahim — said to be in his late 30s or early 40s — graduated from
Northeastern Illinois University in Chicago in December 1997 with a
bachelor's degree in accounting.
Noor Mansuri, a 60-year-old engineer from Chicago's Albany Park
neighborhood who has invested $600,000 with Sunrise since last
November, still expects Ibrahim to return.
He and others think Ibrahim got into some kind of trouble,
speculating that he overextended himself financially and was caught
in the real estate market's decline.
Even so, Mansuri and other investors gathered Sept. 5 at a home near
Devon Avenue and decided to file the bankruptcy petition before banks
that Sunrise did business with seized the firm's assets and nothing
was left. Bank representatives did not return calls seeking comment.
"The man I know wouldn't do this," said Ghazi Feroz Alam, a Devon-
based businessman who invested with Ibrahim. "We don't know what
happened. All this is guessing."
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