University Place Hard Money Lender Indicted for False Statements, Fraud

A hard money lender from University Place was arrested on Tuesday after the grand jury indicted him for conspiracy, making false statements on loan applications and mail fraud. 

Emiel A. Kandi was taken into custody by the FBI Tuesday morning and is expected to make his initial appearance on the indictment in U.S. District court in Tacoma the same afternoon.

According to the indictment, between 2008 and 2009, Kandi submitted false information to obtain home mortgage loans. Some of these loans were designed to let Kandi cash out of properties that Kandi owned through his hard money lending.  

Kandi's lending activities were typically secured by a borrower’s home and charged a high rate of interest. The hard money loans were structured, in some instances, to allow Kandi to seize control of a home if the borrower missed a single payment.  

Other loans included an inflated and often disguised commission payment to Kandi. In at least 19 loans, Kandi and his co-schemers submitted false information regarding the borrowers’ employment, salary, and intention to live in the home. Some of the loan paperwork included inflated appraisals so that Kandi could maximize the money he obtained in the scheme. 

The false statements were designed to make the loans appear legitimate and ensure that they would meet federal lending standards. Many of the loans were processed by Pierce Commercial Bank and were insured by the Federal Housing Administration (FHA), a unit within the federal Department of Housing and Urban Development (HUD). 

The indictment details the false statements that were made in loan applications on properties in Kent, Puyallup, Roy, Gig Harbor and Vancouver, Washington. In one instance detailed in the indictment, the falsified forms were sent to a lender in Texas via U.S. Mail resulting in the charge of mail fraud. 

Mail fraud is punishable by up to 20 years in prison and a $250,000 fine.  Conspiracy is punishable by up to five years in prison and a $250,000 fine.  Making false statements in a loan application is punishable by up to 30 years in prison and a $1 million fine. 

The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law. 

Tuesday's announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. For more information on the task force, visit www.stopfraud.gov.