Linda Marie Kot, 58, Las Vegas, Nevada, a real estate agent, was sentenced to serve 70 months in prison for her participation in a mortgage fraud scheme that netted more than $10 million in fraudulent mortgage loans.
The defendant was sentenced by U.S. District Judge Kent J. Dawson in the District of Nevada. In addition to her prison term, Kot was sentenced to serve five years of supervised release and ordered to pay $3,891,811 in forfeiture.
In May 2012, after a five-day trial, a federal jury in Las Vegas found Kot guilty of three counts of bank fraud and one count of conspiracy to commit mail, wire and bank fraud.
According to court documents and evidence presented at trial, Kot participated in a scheme with members of an investment group to submit fraudulent loan documents to lenders that involved straw buyers, individuals with good credit scores whose names were put on the properties but who were not intended to be responsible for the payment of the mortgages or other expenses of the properties. The scheme took place in 2006 and involved 13 new home purchases, three existing home sales and several loan applications that were not approved.
According to the evidence at trial and court documents, Kot and her co-conspirators caused material misstatements to be placed on loan applications, including information about the true owners and controllers of the properties; whether the properties would be primary residences; and the level of assets and income of the straw buyers. In some cases, Kot put straw buyers on her bank account to make it appear that the straw buyers had assets that they did not have, in order to help them qualify for mortgage loans for which they otherwise would not have been eligible. Kot made over $276,000 in commissions on the fraudulent sales, the evidence at trial showed.
One of the counts of conviction involved a similar scheme that Kot engaged in with members of her family from 2005 to 2006. The evidence at trial showed that Kot and members of her family used straw buyers and fraudulent loan applications to buy properties. Kot and members of her family paid the straw buyers fees, and any profits on sale of the houses were split among family members.
While Kot and her family members were able to sell most of the properties they bought with straw buyers before the market downturn, the investment group that Kot conspired with was not able to do so, according to evidence presented at trial. As a result, most of the mortgages for the houses that the investment group bought in 2006, where Kot acted as the realtor, ended up in default and foreclosure, with many of the straw buyers ending up in bankruptcy.
Three co-conspirators, Hugo Coutelin, Jeff Thomas and Michael Perry, previously pleaded guilty for their roles in the fraud scheme. In September 2012, Coutelin and Perry were each sentenced to 15 months in prison and Thomas was sentenced to time served.
Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada, and Special Agent in Charge Kevin Favreau of the FBI’s Las Vegas Field Office announced the sentence.
This case was investigated by the FBI. Trial Attorneys Nicholas S. Acker and Fred Medick of the Fraud Section in the Justice Department’s Criminal Division prosecuted the case, with assistance from the U.S. Attorney’s Office for the District of Nevada. Fraud Section Trial Attorney Brian Young and former Fraud Section Trial Attorneys Matt Klecka and Joseph Capone also assisted with the investigation.
The sentencing was a result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.