A Sammamish man and five other people were indicted by a federal grand jury in Seattle last week for conspiracy and wire fraud in connection with an estimated $8.5 million mortgage fraud scheme conducted in 2004 and 2005.
The suspects include a lawyer who has since been disbarred, a former bank loan officer and a mortgage broker, and the owner of shell companies involved in “flipping” dozens of properties as part of the fraud.
Those indicted include Mustafa “Marc” Khosraw, 46, of Sammamish, Isaac Palmer, 42, of North Bend, Kristyn Jupiter Moss, 38, of Tacoma, Zachary Joseph Namie, 30, of Seattle, William Anderson, 47, of Bellevue, and Robert Ernest Brandt, 40, the attorney accused of funneling money in the scheme through his client trust account, according to a press release.
This case was part of a nationwide emphasis on mortgage fraud as part of Operation “Malicious Mortgage.” Between March 1 and June 18, the emphasis included 144 mortgage fraud cases and resulted in the charges, convictions or sentencing of 406 defendants, officials said. The operation is a group effort between the Department of Justice and other law enforcement entities.
The indictment states that the suspects conspired to defraud banks and other financial institutions in a scheme where they would identify houses and use shell companies or third parties to purchase the homes. Meanwhile, they recruited “straw buyers” who would agree to buy the home from the conspirators at an inflated price. The suspects helped the straw buyers with fake paperwork for home loans, falsified documents such as appraisals, deposit verification, employment verification and closing documents. They would then split the proceeds from the fraudulent mortgages, and the straw buyers defaulted on the loans after taking up to $20,000 for their fee.
According to the press release, Anderson operated SFN, LLC and Sterling Investments — shell companies that initially purchased numerous properties. Anderson and Moss, who was a loan officer for Viking Bank, created many of the false documents, officials said. Brant and Anderson together ran a company called “Escrow Authority,” which closed the sales of the properties. Khosraw, a mortgage broker, and Namie, a loan officer with a mortgage company created and submitted some of the fake documents, they said. Palmer ran a construction company called GMI Construction and allegedly recruited straw buyers and claimed that some of them worked for him.
Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine.
The case was investigated by the FBI, King County Prosecuting Attorney’s Office and the Washington State Department of Financial Institutions (DFI).