Man Pleads Guilty to Mortgage Fraud Scheme

Allison Tussey —  March 11, 2015 — Leave a comment

Anatoliy Azarov, 33, Sacramento, California, pleaded guilty to mail fraud for a mortgage fraud scheme involving 24 residential properties. The defendant and his co-conspirator convinced investors to purchase their inventory of properties at inflated prices and used the excess funds as working capital to continue their business. According to court documents, beginning in March 2007 and continuing through June 2008, Azarov and a co-conspirator, Vadim Vilchitsa, 32, solicited funds from investors to buy residential properties, renovate them, and flip them. They operated successfully prior to the financial crisis, but when real estate values plummeted, the business was unable to sell its inventory of homes. Azarov and Vilchitsa convinced their investors to purchase the inventory of properties at inflated prices and used the excess funds as working capital to continue their business.

Azarov and Vilchitsa coordinated the purchases of 24 residential properties, although they knew the purchasing investors did not have the income or assets to support the loans for the properties. Loans were obtained for the investors through a third co-conspirator, Yevgeniy Y. Zazhitskiy, 39, a licensed real estate agent and broker who worked as a loan officer. Although he knew the loan applicants’ purported income and assets were false, Zazhitskiy obtained the loans for 23 of the 24 properties involved.

Vilchitsa and Zazhitskiy were charged in related cases and pleaded guilty. For their participation in the scheme, Vilchitsa and Zazhitskiy were sentenced on December 4, 2013, by United States District Judge Kimberly J. Mueller to 15 and 20 months in prison, respectively.

Azarov is scheduled to be sentenced by Judge Mueller on May 27, 2015. Azarov faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross gain/loss. 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.

United States Attorney Benjamin B. Wagner announced the guilty plea.

This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Matthew M. Yelovich are prosecuting the case.

Allison Tussey

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