A former hard-money lender who once described himself as “a wolf” pleaded guilty Friday to charges related to a mortgage scheme that caused a loss of more than $800,000 to the U.S. Department of Housing and Urban Development, the U.S. Attorney’s Office announced Monday.
Emiel Kandi, 37, of University Place, pleaded guilty to conspiracy to submit false statements in loan applications and to making false statements to the Department of Housing and Urban Development (HUD), and submitting false statements in loan applications, according to a news release. Prosecutors agreed to recommend a sentence of no more than 78 months in prison. Under the plea agreement, Kandi will also have to pay restitution of $831,607 to HUD.
Kandi submitted false information in at least 19 loans as a way to make them appear legitimate between 2008 and 2009, according to charges filed in federal district court in Tacoma in June 2013, when he was indicted.
Pierce Commercial Bank processed many of the loans, which were for properties in Kent, Puyallup, Gig Harbor and Vancouver. The loans were insured by the Federal Housing Administration, a unit within the federal HUD.
A Seattle Times investigation, published Nov. 13, 2010, revealed how Kandi preyed on unsophisticated, desperate borrowers who sought short-term loans. The report showed how Kandi set up the loans with predatory terms so that he could quickly take possession of borrowers’ homes. In some cases, he flipped the homes for profit.
In describing his practices, Kandi, told The Times “I am a wolf” whose only requirement for borrowers was to have “a pulse and a legal ability to sign.” In one case, he charged a borrower 45 percent interest and told borrowers if they failed to comply with loan agreements, he would take their property. He was able to make hundreds of thousands of dollars, a Seattle Times investigation found.
Kandi will be sentenced by U.S. District Judge Ronald B. Leighton on Sept. 5. Though the prosecutors agreed to recommend a 78-month prison sentence, Leighton is not bound by the recommendation. The court will also decide whether Kandi owes an additional $169,358 to individual borrowers he represented as a mortgage broker.