Legal News

In Jet City, Allegations of Fast Deals and Fast Cars

By Dionne Searcey

The latest in the onslaught of local prosecutions of mortgage fraud today comes from Seattle where a grand jury has returned a 40-count indictment against seven people alleging they conspired to commit mortgage, bank and wire fraud totaling more than $47 million. Click here for the indictment; here for the story from the Seattle Times; here for a post from last September on mortgage-fraud prosecutions.

According to the Seattle Times story, the seven conspired to fraudulently purchase dozens of homes in Seattle and its tony eastern suburbs at inflated prices. They allegedly got loans using phony buyers.

The Times explains:

"The charges allege they would obtain loans using 'straw buyers' - people who had no intention of living in the home but allowed their identities and credit to be used for a fee - and sometimes using unwitting applicants convinced they could make a buck by buying a home and then immediately reselling it. 'The defendants . . . caused the loan application for the straw buyers and otherwise unqualified buyers to be prepared based upon fraudulent representations related to gross income, employment status, assets and liabilities, and whether the property would be used as a primary residence,' the indictment says."

The defendants then allegedly pocketed the some of the loan proceeds from the escrow accounts to buy two 2004 Lamborghini Gallardo sports cars (one of which is pictured) (recently named the Robb Report’s Car of the Year, it seems), among other items.

The indictment comes on the heels of a racketeering lawsuit filed in federal court in Seattle by ING Bank, the nation’s second-largest thrift, alleging a criminal conspiracy by an escrow agent, a mortgage broker and 10 couples to defraud the bank of at least $6 million through falsified mortgages.

In that suit, the bank says David and Alla Sobol, two of the defendants in the federal indictment in Seattle, formed a family limited partnership to keep fraudulently gained fees out of creditors’ reach.

Attorneys for the men say the Russian-speaking immigrants are victims.

Full post as published by Law Blog - WSJ.com on March 26, 2009 (boomark / email).