Two Beverly Hills real estate agents indicted for their alleged participation in a mortgage fraud scheme have been suspended by their employer, Prudential California Realty, and ordered not to conduct any real estate transactions until the federal case has been resolved.
Joseph Babajian and Kyle Grasso are among the top-producing real estate agents in Southern California, and often work together.
Before their recent suspension, the two men together had more than $65 million in residential real estate listed for sale.
Babajian was recently reported to be a co-listing agent on a 15,000-square-foot Beverly Hills mansion priced at $24.95 million.
The agents, who work out of Prudential's Estate Properties office on Wilshire Boulevard, are independent contractors whose pay is solely derived from commissions earned on real estate transactions.
The brokerage said it had directed them "not to engage in any activity requiring a real estate license" until the federal case has been resolved.
"We have cooperated in the government investigation and will continue to do so until this matter is resolved on its merits," Prudential spokesman Israel Kreps said.
Both men have denied any wrongdoing. A representative for the agents declined to comment on Prudential's action.
Last week, the U.S. attorney's office in Los Angeles indicted the real estate agents, along with two licensed appraisers, on multiple counts of conspiracy, bank fraud and loan fraud.
The foursome allegedly participated in a complicated scheme that involved inflating the price of several homes in order to trick banks into funding mortgage loans that were hundreds of thousands of dollars higher than the properties actually cost, according to court documents.
Prudential California, whose parent is Warren E. Buffett's Berkshire Hathaway Inc., said it would transfer all of Babajian's and Grasso's listings to other agents.
If Babajian and Grasso are convicted, they also could be subject to disciplinary action by the California Department of Real Estate, including the revocation of their real estate licenses, according to state law.