14 Year Prison Term for Straw Buyer Fraud

Rachel Dollar —  March 21, 2016 — Leave a comment

Vera Kuzmenko, 46, Loomis, California was sentenced to 14 years in prison for multiple counts of mail and wire fraud, witness tampering, and money laundering associated with her involvement in a mortgage fraud scheme that cost financial institutions over $16 million.

On December 4, 2015, after a 16-day trial, a federal jury returned guilty verdicts for Kuzmenko and Rachel Siders, 40, Roseville, California. Siders is scheduled to be sentenced on June 21, 2016.

According to evidence presented at trial, from late 2006 through early 2008, Kuzmenko and Siders engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. They were responsible for securing more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. Records introduced at trial showed Vera Kuzmenko received millions of dollars.

Kuzmenko, who had been a licensed real estate agent for part of the scheme, created fraudulent loan applications on behalf of the straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. The loan paperwork also hid from lenders millions of dollars of payments that went to the defendants. She also served as a straw-buyer herself. With respect to the witness tampering count, the evidence showed that after Kuzmenko learned the FBI was investigating her, she told various witnesses to lie to the FBI and blame a dead woman for the fraud.

U.S. Attorney Benjamin B. Wagner stated: “There were many causes for the mortgage crisis that decimated the national economy and hit the Sacramento region so especially hard. One factor that did not help, and that contributed to the explosion of foreclosures in our neighborhoods was the proliferation of mortgage fraud schemes like the one operated by Vera Kuzmenko. My office will continue to seek to hold accountable those who profited from such schemes, and the sentence imposed today is a significant reminder that there is a heavy price to pay for those who seek to profit through fraud.”

Vera Kuzmenko’s scheme cost financial institutions over $16 million,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Fraud in the mortgage industry has played a major role in almost crippling this nation’s economy. While today’s sentencing cannot reverse the damage caused by these defendants, IRS-CI is committed to investigate individuals who engage in deceptive and fraudulent behavior, fueled by greed.”

As the mastermind of a scheme to intentionally defraud members of her own community, Vera Kuzmenko, coordinated a network of individuals who perpetrated a multimillion-dollar fraud scheme,” said Assistant Special Agent in Charge Manuel Alvarez of the Federal Bureau of Investigation Sacramento field office. “Her sentence cannot undo the damage done to her community’s trust and financial well-being, but it will ensure justice for victims and serve as a warning to other would-be fraudsters.”

United States District Judge John A. Mendez sentenced Kuzmenko.  The case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley and Michael D. Anderson and Special U.S. Attorney David J. Ward are prosecuting the case.

On October 20, 2015, Judge Mendez sentenced co-defendants Peter Kuzmenko, 37, of West Sacramento, to 19 years in prison; Aaron New, 41, of Sacramento, to 11 years and three months in prison; Nadia Kuzmenko, 36, formerly of Loomis, to eight years in prison; and Edward Shevtsov, 52, of North Highlands, to eight years in prison. They were found guilty on February 13, 2015, after a 21-day trial, of multiple counts of mail and wire fraud associated with the mortgage fraud scheme. In addition, Peter Kuzmenko, Edward Shevtsov, and Aaron New were found guilty of money laundering associated with the scheme, and Nadia Kuzmenko was found guilty of witness tampering.

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Rachel Dollar

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