A Kirkland woman and three Seattle-area residents were arrested Saturday on a 21-count indictment charging them with conspiracy, bank fraud, wire fraud and mail fraud.
The mortgage fraud scheme ran from 2006-2008 and defrauded more than 10 banks, financial institutions, and mortgage lenders, of more than $8.6 million. More than 50 mortgages were involved on properties in a variety of communities around Puget Sound including Medina, Renton, South Seattle, Bellevue, Redmond, and Kirkland.
Kirkland resident Celia Perez Morales, 35 and three other defendants – Bellevue resident Jonathan Mendoza Martinez, 34; his sister Seattle resident Jazmin Villalba Martinez, 30; and 41-year-old Jorge Castrejon Pichardo of Mountlake Terrace – made their initial appearance in U.S. District Court in Seattle on Saturday.
According to the indictment, three of the defendants worked at Emerald City Escrow and at Nationwide Home Mortgage and conspired to use straw buyers to defraud banks. The fourth defendant worked at a tax preparation business and provided some of the false documentation submitted with the loan applications.
The conspirators submitted false financial, employment, and tax information to apply for residential mortgage loans. They falsely inflated the sale price of the properties. After the lenders funded the loans, the conspirators kept the excess proceeds and the straw buyers quickly defaulted on the mortgages, according to the charges.
The victim banks included Washington Mutual (now JPM Chase), Bank of America, American Sterling Bank, ING Bank, IndyMac Bank, and Merrill Lynch & Co., Inc., among others. Documents in the scheme were submitted via mail and wire.
In all, the defendants secured, or aided and abetted in securing, through unqualified buyers, at least 50 mortgage loans, representing approximately $22.4 million in loan proceeds, based on false and fraudulent representations, resulting in a loss to financial institutions and mortgage lenders totaling approximately $8.7 million.
Each count in the indictment is punishable by up to 30 years in prison and a $1 million fine.
The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), the U.S. Postal Inspection Service (USPIS), and the Federal Bureau of Investigation (FBI). The case is being prosecuted by Assistant United States Attorney Mike Lang and James Oesterle.
