Pierce Co. Hard Money Lender Emiel Kandi Facing Major Mortgage Fraud Charges

Emiel A. Kandi, a 36-year-old hard money lender from University Place, Washington, was arraigned today on charges of conspiracy, making false statements on loan applications, and mail fraud in what federal prosecutors are calling a massive mortgage fraud scheme.

The FBI swooped down on Kandi this morning, taking him into custody and setting his initial court appearance for 2:30 pm at the U.S. District Court in Tacoma. The grand jury has indicted Kandi for orchestrating a scheme that preyed on individuals who lost their homes and then defrauded taxpayer-funded institutions like the Federal Housing Administration (FHA).

“The business practices of this defendant harmed individuals who lost their homes, and the lies told in mortgage documents harmed taxpayer-funded institutions,” said U.S. Attorney Jenny A. Durkan. “These mortgage fraud cases result from thorough investigations, and I’m grateful for the hard work of those working to hold Mr. Kandi accountable.”

According to the indictment, between 2008 and 2009, Kandi submitted false information to obtain home mortgage loans, some designed to allow him to cash out properties he owned. His lending activities typically secured by a borrower’s home carried high interest rates. The hard money loans were structured in some cases to enable Kandi to seize control of a home upon the borrower missing a single payment. At least 19 loans included false information about the borrowers’ employment, salary, and intention to live in the homes.

The scheme involved inflated appraisals, disguising commissions, and sending falsified loan applications through U.S. Mail to lenders in Texas, resulting in mail fraud charges. Mail fraud is punishable by up to 20 years in prison and a $250,000 fine, while conspiracy carries a maximum of five years and the same fine. False statements on loan applications can lead to 30 years in prison and a $1 million fine.

The investigation into Kandi’s activities was a collaborative effort between the FBI and the Department of Housing and Urban Development (HUD). This case is part of the Financial Fraud Enforcement Task Force, which has been instrumental in investigating and prosecuting financial crimes. The Justice Department has filed over 10,000 financial fraud cases since the task force was formed in 2009.