Hard Money Lender Indicted on Mortgage Fraud Charges

Allison Tussey —  June 12, 2013 — Leave a comment

Emiel A. Kandi, University Place, Washington, a hard money lender, was arrested after being indicted by the grand jury for conspiracy, making false statements on loan applications, and mail fraud.

The defendant was taken into custody by the FBI and will make his initial appearance on the indictment in U.S. District court in Tacoma.

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 Kandi cash out of properties that Kandi 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).

The indictment details the false statements that were made in loan applications on properties in Kent, Puyallup, Roy, Gig Harbor, and Vancouver, Washington. In one instance detailed in the indictment, the falsified forms were sent to a lender in Texas via U.S. mail, resulting in the charge of mail fraud.

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 charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI and the Department of Housing and Urban Development-Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Brian Werner and Special Assistant United States Attorney Hugo Torres. Mr. Torres is a King County Deputy Prosecutor specially funded by the Washington Department of Financial Institutions (DFI) to handle mortgage fraud cases in state and federal court.

“The business practices of this defendant harmed individuals who lost their homes. Then, the lies told in mortgage documents harmed taxpayer funded institutions such as the Federal Housing Administration,” said U.S. Attorney Jenny A. Durkan. “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.”

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