Emiel Kandi called himself a wolf and people thought the hard money lender was untouchable.
But on Tuesday, a federal grand jury indicted the 36-year-old University Place man in a mortgage fraud scheme reaching back to 2008.
He pleaded not guilty to conspiracy, making false statements on loan applications and mail fraud. If convicted as charged, he faces up to 30 years in prison and $1 million in fines. Kandi was released pending trial with the conditions he surrender his passport and remain in Western Washington,
“Given that this had been an ongoing investigation for some time, I think the government felt comfortable going forward with the detention hearing at the initial appearance,” said Emily Langlie, spokeswoman for the U.S. Attorney’s Office.
The public defender who represented Kandi in the initial proceedings was not immediately available for comment.
For a time, Kandi worked as what’s known as a hard money lender, a lender of last resort providing short-term loans to people who couldn’t get bank loans and were desperate to hold onto their homes.
He admitted in 2010 to charging borrowers as much interest as possible — once as much as 45 percent — and taking their property if they missed a single payment or otherwise failed to comply with the loan agreements.
The loans might have been unethical, but they weren’t illegal. What prosecutors believe was illegal was how he went about filing the loans.
Federal prosecutors allege he submitted false information on at least 19 home mortgage loan applications in 2008 and 2009 for properties in Gig Harbor, Puyallup, Roy, Kent and Vancouver, Wash.
Kandi allegedly lied about borrowers’ employment, salary and intention to live in the homes to ensure they met federal lending standards, according to the U.S. Attorney’s Office.
The loans were processed by Pierce Commercial Bank and insured by the Federal Housing Administration, a division of the Department of Housing and Urban Development.
The loans were designed to let Kandi cash out of properties, seize a borrower’s home and sometimes sell it quickly for a profit and to boost his bank account with inflated commissions, prosecutors said.
In one case, prosecutors said, Kandi sent a false form to a lender in Texas, which prompted the mail fraud charge.
It’s unknown how many loans Kandi offered, but a handful of borrowers took him to court in hopes of recovering their money or property.
In 2010, he told The Seattle Times his only requirement for a borrower is “a pulse and a legal ability to sign.”
“I am a wolf,” he said.
Kandi has gained local notoriety before.
He’s operated a medical marijuana dispensary in Tacoma, owned the Habana Cafe and Casino until he sold it in 2001 and made waves trying to court City Council members while trying to open another casino in downtown Tacoma.
He and his father also made news while traveling to Iraq in 2004 to exchange prewar Iraqi dinars for new ones backed by the United States. They ended up spending a week in a Middle Eastern prison.Staff writer Alexis Krell contributed to this report. Stacia Glenn: 253-597-8653 firstname.lastname@example.org