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Hard money lender indicted for conspiracy, false statements; Kent properties involved
The FBI arrested a University Place hard money lender Tuesday after he was indicted by a grand jury for conspiracy, making false statements on loan applications and mail fraud, according to the U.S. Attorney's Office.
The indictment details the false statements that were made in loan applications on properties in Kent, Puyallup, Roy, Gig Harbor and Vancouver, Wash. In one instance detailed in the indictment, the falsified forms were reportedly sent to a lender in Texas via U.S. mail resulting in the charge of mail fraud.
Emiel A. Kandi, of University Place, will make his initial court appearance Tuesday in U.S. District Court in Tacoma.
"The business practices of this defendant harmed individuals who lost their homes," said U.S. Attorney Jenny A. Durkan in a media release. "Then the lies told in mortgage documents harmed taxpayer funded institutions such as the Federal Housing Administration. These mortgage fraud cases result from thorough and intensive investigations. I’m grateful for the hard work of the dedicated agents and investigators working to hold Mr. Kandi accountable.”
According to the indictment, between 2008 and 2009, Kandi submitted false information to obtain home mortgage loans. Some of these loans were designed to let him cash out of properties that he owned through his hard money lending. Kandi's lending activities were typically secured by a borrower’s home and charged a high rate of interest.
The hard money loans were structured, in some instances, to allow Kandi to seize control of a home if the borrower missed a single payment. Other loans included an inflated and often disguised commission payment to Kandi. In at least 19 loans, Kandi and his co-schemers submitted false information regarding the borrowers’ employment, salary, and intention to live in the home.
Some of the loan paperwork included inflated appraisals so that Kandi could maximize the money he obtained in the scheme. The false statements were designed to make the loans appear legitimate and ensure that they would meet federal lending standards. Many of the loans were processed by Pierce Commercial Bank and were insured by the Federal Housing Administration (FHA), a unit within the federal Department of Housing and Urban Development (HUD).
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine. Conspiracy is punishable by up to five years in prison and a $250,000 fine. Making false statements in a loan application is punishable by up to 30 years in prison and a $1 million fine.
The arrest is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.
Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case is being investigated by the FBI and the Department of Housing and Urban Development, Office of Inspector General.