Archives For Washington

Lori Lynn Andrew, 48, Cashmere, Washington, the owner of Hartman Escrow, Inc., a now defunct real estate escrow firm, was indicted by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud.  The Washington State Department of Financial Institutions arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. Andrew had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.

According to the indictment, beginning in about January 2011, and continuing until July 2012, Andrew used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions. Andrew made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. Andrew forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use. Andrew used the money for casino payments, credit card bills and other personal expenses. Andrew defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.

In all the indictment alleges Andrew defrauded the financial institutions and other customers of approximately $2 million.

Each count of bank, mail or wire fraud is punishable by up to 30 years in prison and a fine of up to $1 million.

The indictment was announced by U.S. Attorney Annette L. Hayes. The case was investigated by the Washington State Department of Financial Institutions, the FBI, the Postal Inspection Service (USPIS) and the Housing and Urban Development Office of Inspector General (HUD-OIG).

The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.

Sam Tuttle, a vice-president and loan officer at PC Bank Home Loans, Ben Leske, a loan officer at PC Bank Home Loans, Angela Crozier, a senior loan processor at PC Bank Home Loans, and Ed Rounds, a loan officer at PC Bank Home Loans, were indicted by a grand jury in the U.S. District Court for the Western District of Washington at Tacoma and charged with conspiracy to make false statements on loan applications and to commit bank fraud and bank fraud, .

According to the indictment, from 2004 through 2008, Tuttle, Leske, Crozier and Rounds, along with Shawn Portmann, a vice-president and loan officer at PC Bank Home Loans, Craig Meyer, a vice-president and loan officer at PC Bank Home Loans, and Alice Barney, Portmann’s personal assistant, and other co-conspirators, knowingly made false statements and willfully overvalued property for the purpose of influencing the actions of Pierce Commercial Bank and other federally insured financial institutions, in connection with applications for mortgage loans.  PC Bank Home Loans was a mortgage lending office of Pierce Commercial Bank. During the time they were employed at PC Bank Home Loans, the alleged conspirators originated in excess of 5,000 mortgage loans representing in excess of $1 billion in loan proceeds. The loans detailed in the indictment are alleged to have contributed to the failure of Pierce Commercial Bank.

The indictment alleges that the conspirators solicited individuals, including through mass marketing, who were seeking to purchase homes.  They were solicited to prepare and submit mortgage loan applications regardless of whether they might qualify for the loans. The co-conspirators caused loan applications to be prepared based upon fraudulent representations related to gross monthly income, employment status, rental status, assets and liabilities and whether the property would be used as a primary residence.  Sometimes the false statements were made with the knowledge of the borrowers and in other cases, the borrowers did not know the false statements were being inserted. If the borrowers did not qualify, co-conspirators would, at times, seek the assistance of Portmann and other co-conspirators for advice on how to falsely modify the loan applications to ensure they passed underwriting.  Among the assistance provided by Portmann was the use of his assistant, Barney, to provide a Verification of Rent form for inclusion in the loan package, that falsely asserted the borrower was paying rent for an apartment owned by Portmann when, in fact, the borrower was not residing in, and had never resided in, the apartment.

The indictment further alleges that the co-conspirators would collude with third parties, including appraisers, to ensure the loans successfully closed.  The co-conspirators would pressure appraisers to generate specific values, even when told that the values were not supported by appraisal methods.

The indictment also alleges that when there were defaults on loans that were sold into the secondary market, the co-conspirators would take steps to ensure that Pierce Commercial Bank and the secondary investors did not discovery the underlying fraudulent statements.  The efforts included Portmann, Tuttle and Meyer forming a separate company to buy defaulted loans back from secondary investors so that no further investigation would be done on the defaulted loans.

According to the indictment, the fraudulent scheme caused in excess of $9.5 million in losses to Pierce Commercial Bank, secondary investors and HUD/FHA.

Aleksandr Kravchenko, 36, King County, Washington, who fled to Moldova, in Eastern Europe before being indicted by a federal grand jury for 55 loans fraudulently obtained from Westsound Bank, was sentenced in U.S. District Court in Seattle to five years in prison.

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Ashley Bonair Chambers, 58, Spokane, Washington, was sentenced after having been convicted in December 2014 of one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, seven counts of wire fraud, and one count of wire fraud affecting a financial institution.

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Aleksandr Kravchenko, 36, and Galina Kravchenko, 35, King County, Washington, who fled to Moldova, Eastern Europe, before being indicted by a federal grand jury for bank fraud related to loans fraudulently obtained from Westsound Bank, entered guilty pleas in U.S. District Court in Seattle, Washington.

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Danny Zhao, 36, Ashburn, Virginia, pleaded guilty to conspiracy to commit bank fraud admitting his role in a short sale mortgage fraud scheme.

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Emiel A. Kandi, 37, University Place, Washington, a former hard money lender, was sentenced in U.S. District Court to five years in prison, three years of supervised release and $831,607 in restitution for structuring some hard money loans to allow him to seize control of a home if the borrower missed a single payment, in others he submitted false information to lenders regarding the borrowers’ employment, salary, and intention to live in the home.

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William Beard, 40, Seattle, Washington, was sentenced to 16 months in federal prison for his participation in a Southern California mortgage elimination scheme that promised to prevent foreclosure through the paying off of the distressed homeowner’s mortgage.

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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.

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Local Records Office, Bellflower, California, a company that allegedly preys on unsuspecting new property owners, is the subject of a Consumer Protection Act lawsuit.

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