Emiel Kandi Pleads Guilty in $800K Mortgage Fraud Scheme

GRIMY TIMES: Emiel A. Kandi, a former hard money lender from University Place, Washington, has pleaded guilty to conspiracy to submit false statements in loan applications and making false statements to the Department of Housing and Urban Development (HUD). The 37-year-old’s scheme resulted in over $800,000 in losses for HUD.

Kandi was indicted last June for his role in a mortgage fraud scheme. He is scheduled to be sentenced by U.S. District Judge Ronald B. Leighton on September 5, 2014. While prosecutors recommend no more than 78 months in prison, the judge’s sentence could exceed this recommendation.

Records show that between 2008 and 2009, Kandi submitted false information to obtain home mortgage loans. Some of these were designed to allow him to cash out properties he owned through his hard money lending business. The high-interest loans sometimes included provisions allowing Kandi to seize control of a home upon a missed payment. Fraudulent loan applications often featured inflated appraisals and fake borrower details, including employment, salary, and intention to live in the property.

False statements were made on numerous loan applications across Western Washington, involving properties in Pierce, King, and Clark counties. As part of his plea agreement, Kandi has agreed to restitution of $831,607 to HUD. The court will determine if he owes an additional $169,358 to individual borrowers represented by him as a mortgage broker.

The investigation into Kandi’s actions was conducted by the FBI and the HUD Office of Inspector General. Assistant United States Attorney Brian Werner and Special Assistant United States Attorney Hugo Torres are prosecuting the case. Torres is a King County Deputy Prosecutor funded by the Washington Department of Financial Institutions to handle mortgage fraud cases.

This case is part of an ongoing effort by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which has been instrumental in investigating and prosecuting financial crimes since its creation in 2009. Over the past three fiscal years, the Justice Department has filed over 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.