8 Charged for Artificially Inflating Purchase Prices

Allison Tussey —  October 6, 2011 — Leave a comment

Valeri Mysin, 31, Citrus Heights, Calif.; Angela Shavlovsky, 52, Sacramento, Calif.; Nikolay Katinskiy, 28, Lynwood, Wash.; Michael Kennedy, 44, Miami Beach, Fla.; Alexander Kokhanets, 34, Roseville, Calif.; Boris Murzak, 38, and Zinaida Murzak, 40, both of Sacramento, Calif.; and Vitaliy Tuzman, 31, West Sacramento, Calif., have been indicted and charged with conspiracy to commit mail fraud in connection with a mortgage fraud scheme involving the purchase of seven homes.

All seven properties were foreclosed, resulting in more than $1.8 million in losses for mortgage lenders. Katinsky and Kennedy were also charged with money laundering in connection with the scheme. Defendants Shavlovsky, Katinskiy, Kennedy, were arrested by FBI agents, and Kokhanets, Boris Murzak, and Zinaida Murzak were issued a summons.

According to court records, the mortgage fraud scheme involved purchasing homes at prices substantially higher than the homes were worth in order for the defendants to receive cash at the close of escrow. The indictment alleges that Shavlovsky recruited Katinsky and Kennedy to act as strawbuyers and finance 100 percent of the artificially inflated purchase price of homes by submitting fraudulent loan applications to lenders, which falsely represented Katinsky‘s and Kennedy‘s employment, income, and intent to occupy the homes as their primary residence.

According to the indictment, Valeri Mysin, a licensed California real estate agent, prepared the phony applications and attempted to disguise his involvement with these fraudulent loans by making it appear that another loan officer in his office had handled them. Kokhanets, Boris Murzak, Zinaida Murzak, and Tuzman were homeowners who allegedly sold their properties as part of this scheme. In order to artificially inflate the sales price of their homes, Kokhanets, Tuzman, and the Murzaks are alleged to have signed fake invoices falsely claiming that repairs or improvements had been completed on their properties. After the lenders funded the fraudulent loans, the indictment alleges that the defendants diverted a portion of the proceeds from the inflated sales price directly to themselves and to businesses controlled by the defendants and others.

If convicted, the defendants face a maximum penalty of 20 years in prison for conspiracy to commit mail fraud, 10 years in prison for money laundering, and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

United States Attorney Benjamin B. Wagner announced the federal grand jury indictment.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys R. Steven Lapham and Dominique N. Thomas are prosecuting the case.

Mortgage fraud is a priority area for the President’s Financial Fraud Enforcement Task Force.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit StopFraud.gov.

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Allison Tussey

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