A Shoreline resident was among the last of seven people, charged in a $47 million mortgage fraud scheme, to plead guilty Friday, Oct. 2 in U.S. District Court in Seattle. The charges were Conspiracy to Commit Bank Fraud, Mail Fraud and Wire Fraud and Filing a False Tax Return. The group was indicted and arrested in March.
The seven defendants were involved with three Bellevue, Wash. companies: Emerald City Escrow LLC, Nationwide Home Lending LLC and Kobay Financial Corporation.
Sandra Thorpe, 55, of Shoreline, was an accountant who falsified income statements and employment verification letters. She faces up to five years in prison and a $250,000 fine. Her sentencing will be Dec. 4.
Viktor Kobzar, 32, of Federal Way, faces the stiffest sentence of the group – up to eight years in prison and fines of up to $350,000 – when he sentenced by U.S. District Judge Marsha J. Pechman on Jan. 8. Kobzar was a mortgage broker.
Joining Thorpe are Camie Byron, 28, of Renton, a loan officer for Kobay and Nationwide; Alla Sobol, 28, of Renton, a mortgage broker for Nationwide; and David Sobol, 40, of Issaquah, an owner and operator of Emerald City Escrow. As Thorpe, they face up to five years in prison and a $250,000 fine when sentenced on Dec. 4.
Guilty pleas also came from two individuals. Donata Baydovskiy, 28, of Bellevue, part owner of Emerald City Escrow, faces five years in prison and a $250,000 fine when sentenced on Dec. 18. Her husband, Vladislav Baydovskiy, 31, of Bellevue, a mortgage broker, is scheduled to be sentenced Jan. 8, 2010 and faces up to eight years in prison and fines of up to $350,000.
All of the defendants will be required to make restitution in amounts to be determined by the court.
According to records filed in the case, investigators reviewed dozens of loan files that were submitted by Nationwide and Kobay to lending institutions. In 69 of these loan files, representing over eighty percent of the reviewed files, fraudulent information was submitted to obtain some $47 million in loans. All of the loans were closed at Emerald City Escrow. The defendants used “straw buyers” and other unqualified buyers to obtain purchase money and refinance loans. Employees and principals at Kobay and Nationwide prepared and submitted falsified loan applications and related verification documents to lenders in a scheme to conceal the fact that buyers were otherwise unqualified to obtain the loans. Relying on the falsified statements, lenders extended loans that often exceeded the value of the property and the borrower’s ability to re-pay the loan.
One property in Medina, Wash. was sold to a recruited buyer for $775,000 and within six months was sold again to a second recruited buyer for $1.2 million. The falsified loan application submitted by KOBAY on behalf of the second buyer reported a monthly income of $45,000 a month with assets of more than $800,000. In fact, the buyer operated a house cleaning business and earned between $18,000 and $20,000 a year. The loan was closed at Emerald City Escrow. Bank records indicate hundreds of thousands of dollars in proceeds from the transaction were paid directly to be used to benefit Viktor Kobzar and Vladislav Baydovskiy. Some of the funds went to pay Vladislav Baydovskiy’s homeowner’s management fees and moorage fees for his yacht.
A second property in Newcastle, Wash. was purchased by David Sobol in Aug. 2007, for $669,950. A month later Sobol sold the property to co-defendant Camie Byron for $1,000,000. Using falsified loan applications that misrepresented her income and assets, Byron obtained two loans on the property totaling about $900,000. Byron then “flipped” the property again to another straw buyer in Nov. 2007. The purchase price in Nov. 2007 was $1.4 million. The loan application submitted by the buyer in Nov. 2007 grossly inflated the buyer’s income to meet the lending requirements. According to the application, the buyer earned more than $324,000 in 2005 and $385,000 in 2006. In fact, the buyer reported income to the IRS of $13,245 in 2005 and $16,600 in 2006.
The defendants have agreed to forfeit $2.5 million and a number of luxury vehicles. The vehicles include a 2004 Lamborghini Gallardo, a 2006 BMW 750 and a 2002 BMW X5 and a 31-foot Bayliner.
The case is being investigated by the FBI, U.S. Postal Inspection Service, and the Internal Revenue Service Criminal Investigation (IRS-CI). Prosecution is being handled by Assistant United States Attorneys Jim Oesterle and Carl Blackstone.
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