Joshua Kebede pled guilty to one count of conspiracy to commit wire fraud. Kebede was indicted in the Federal Court for the Western District of Washington along with Akram Aswad Almussa on October 20, 2005. Kebede was indicted on two counts and Almussa was initially indicted on six counts of conspiracy and wire fraud. Two additional counts were added against Almussa by way of superseding indictments.

Kebede admitted in his guilty plea that he conspired with Almussa, John Gonzalez and others (including W.A., M.K. and P.W.) to cause others to obtain fraudulent mortgage loans using materially false information. Some of the proceeds were diverted to or used to acquired residential property for Kebede and other conspirators. It was Kebede's intent, according to the plea, to gain control of single family residences, renovate and remodel the residences and sell them for a profit. As he was unable to legitimately obtain financing and pay for the remodeling using his own credit, he set forth to do so illegally.

Kebede and his co-conspirators would identify properties that were for sale. They would enter into real estate purchase and sale agreements to purchase the properties in their names or the names of their companies (including Samuel and Associates and E.C. and Associates.)

While the purchase transactions were pending, the conspirators would flip the property by recruiting a third party – often a straw buyer or 'credit investor' – typically at a purchase price significantly higher than the amount reflected in the pending purchase. Recruiters, including John Gonzalez, would be paid a fee for their assistance in locating straw buyers and straw buyers were typically told they would not be required to live in the homes.

The conspirators would then cause the straw buyer to apply for a loan to finance the purchase price. Materially false information was submitted to obtain financing, including inflated income levels or fictitious employment information, false certifications of occupancy, and false statements inflating buyer assets.

Once the loan was obtained in the name of the straw buyer, the loan would be used to purchase the property from the original legitimate seller for the original lower sales price. The excess loan funds would be used to pay the closing costs and straw buyer and the excess funds would be remitted to the conspirators.

On October 20, 2003, Kebede entered into a contract to purchase 4398 Somerset Blvd, SE, Bellevue, Washington from W.K. for $480,000. Kebede recruited K.K. to purchase the property for $580,000. K.K. was paid approximately $8,500 to act as purchaser. The loan for this purchase was placed by a mortgage brokerage where Almussa was employed and he acted as the account executive on the transaction. The property purchases and sale were closed as same day flips on November 26, 2003 at the law offices of Stephen K. Araki, according to the guilty plea.

Kebede entered into a contract to purchase the home of C.M. and O.M. at 15800 71st Street, Kenmore, Washington (as Joshua Kebede or assigns) for $380,000. The property was ultimately purchased by EC and Associates. Kebede and Almussa recruited C.E. to act as straw buyer and purchase the property for $483,000. C.E. was paid $5,000 for her role in the transaction. Almussa was likewise the account executive on this transaction and were also closed as same day flips at the law offices of Stephen K. Araki, according to the Plea Agreement.

In the guilty plea, Kebede further admitted that he contacted a witness while on bond and instructed the witness to lie to federal agents.

Kebede is scheduled to be sentenced on January 18, 2007.