Emiel A. Kandi, 37, University Place, Washington, a former hard money lender, pleaded guilty to conspiracy to submit false statements in loan applications and make false statements to the Department of Housing and Urban Development and to submitting false statements in loan applications.
As previously reported by Mortgage Fraud Blog, the defendant was indicted for a mortgage scheme that caused a loss of more than $800,000 to the U.S. Department of Housing and Urban Development. Prosecutors agree to recommend a sentence of no more than 78 months in prison when Kandi is sentenced by U.S. District Judge Ronald B. Leighton on September 5, 2014. However, Judge Leighton is not bound by that recommendation and can impose any sentence allowed by law.
According to the plea agreement, between 2008 and 2009, Kandi submitted false information to obtain home mortgage loans. Some of these fraudulent home mortgage 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 fraudulent home mortgage 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).
False statements were made in loan applications for various properties in Western Washington, including properties in Pierce, King, and Clark Counties. Under the terms of the plea agreement, Kandi agrees to make restitution of $831,607 due to HUD. The court will decide whether he also owes an additional $169,358 to individual borrowers whom Kandi represented as a mortgage broker.
U.S. Attorney Jenny A. Durkan announced the guilty plea.
The case was 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.