We are issuing this notice to raise awareness of a borrower profile recently presented to one of our members that exhibited multiple indicators of material misrepresentation. Based on the structure and coordination observed, there is a reasonable likelihood that similar scenarios may be presented to other private lenders.

The transaction was positioned as a well-documented opportunity involving an entity and guarantor associated with a Phoenix, Arizona market footprint. On initial review, the file appeared complete and consistent with standard underwriting expectations. The good news is that the lender’s internal controls and diligence processes flagged the inconsistencies early, preventing the file from advancing to approval. Not all organizations have the same safeguards in place, so we believe it is important to highlight the red flags observed.

Inconsistencies in entity history and authority: Third‑party verification tools indicated that the individual presented as the guarantor had no documented history of signing or transacting on behalf of the entity or any related entities listed in the SREO.

Bank statement irregularities:

• Statements reflected a large opening balance inconsistent with typical account behavior and lacking any supporting documentation for the deposit.
• When questioned, the explanation for the source of funds was vague and unsupported.
• Fee activity on the statements did not align with the bank’s published fee‑waiver criteria, suggesting the statements were not authentic.

Verification of Deposit (VOD) conflict: A direct VOD from the financial institution showed average and maximum balances dramatically lower than those reflected on the submitted statements, confirming the statements were fabricated.

Questionable business legitimacy: The business website appeared to be a low‑quality, rapidly assembled site with indicators suggesting it was created solely to support the loan narrative.

AAPL will not be naming any individuals or entities. Our goal is to raise awareness of the types of red flags that may indicate a fraudulent submission. If you encounter similar patterns or have questions about fraud‑prevention practices, please contact the AAPL Fraud Steering Committee at fraud@aaplonline.com.