Four people face 21 counts in an $8.7-million mortgage fraud scheme that involved more than 50 mortgages to fake people, according to a news release from the United States Attorney’s Office.
Three of the people who face the allegations worked at mortgage or escrow companies and one was a tax preparer, according to the U.S. Attorney’s Office.
The scheme defrauded more than 10 banks, financial institutions and mortgage lenders, and more than 50 mortgages were involved on properties, including ones in Redmond, Bellevue, Kirkland, Medina, Renton and south Seattle, the office said.
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Making their first appearances in U.S. District Court on Friday were Celia Perez Morales, 35, of Kirkland; Jonathan Mendoza Martinez, 34, of Bellevue; his sister, Jazmin Villalba Martinez, 30, of Seattle; and Jorge Castrejon Pichardo, 41, of Mountlake Terrace, according to the news release. They were arrested on Friday.
Three of the defendants worked at Emerald City Escrow and at Nationwide Home Mortgage and the fourth defendant worked at a tax preparation business.
According to the U.S. Attorney’s Office, between 2006 and 2008, the three that worked for mortgage or escrow companies allegedly created straw buyers to defraud banks and the one that worked in tax preparation allegedly provided some of the false documentation submitted with the loan applications.
The four face accusations of submitting false financial, employment and tax information to apply for residential mortgage loans, and falsely inflating the sale price of the properties.
After the lenders funded the loans, the straw buyers quickly defaulted on the mortgages, and the four allegedly kept the excess proceeds, according to the press release.
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, according to the U.S. Attorney’s Office.
According to the news release from the office, the group is accused of borrowing 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 about $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, the U.S. Postal Inspection Service and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Mike Lang and James Oesterle, according to the U.S. Department of Justice.
