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Financial Crimes
10/12/2010

Former Washington man sentenced in mortgage fraud investigation

SEATTLE - A former resident of Washington state who worked as a loan originator was sentenced to 11 years and three months in federal prison and more than $4 million in restitution for his role in mortgage fraud scheme uncovered by agents with the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI).

William S. Poff, 37, of Marshall, Mich., was convicted in March 2010 on 30 felony counts of conspiracy, bank fraud and money laundering offenses. Poff, a licensed notary and loan originator, represented himself in a seven-day federal bench trial.

Poff is one of five people arrested in June 2009 in connection with a mortgage fraud scheme that cheated banks and property sellers out of more than $18 million. At the time of their arrest, all five had been indicted over allegations that they were responsible for 80 fraudulent mortgage transactions in communities throughout King and Pierce Counties over a three-year period starting in 2005.

According to records filed in the case, the conspirators obtained financing from banks and in some cases from home sellers who were asked to extend private loans to the buyers for a portion of the purchase price. The sellers were unaware that the conspirators had already obtained financing from commercial lenders to cover the full cost of the home.

Later, when payments on the homes were not made, the properties fell into foreclosure. The homes were then sold for less than the total of all loans secured for the property. The sellers who had extended private loans to the buyers were left with nothing.

During Poff's trial, prosecutors focused on the sales of eight different properties using different means of deception including straw buyers, forged documents, lies on loan applications, inflated sales prices and undisclosed seller financing. Prosecutors showed how Poff and his wife pocketed $1.7 million from the scheme and used it for his living expenses, trips and child support payments.

In addition, there was evidence that bogus appraisals were submitted and fictitious home repair companies were hired to do repair work on the properties. Proceeds from the home sales would go to the fake companies that had, in fact, done no work.

"The defendants in this case were mortgage professionals who manipulated the real estate market, pocketed the illegal proceeds and knowingly defrauded innocent clients who unwittingly were caught up in their criminal scheme," said Leigh Winchell, special agent in charge of ICE Homeland Security Investigations in Seattle. "ICE will continue to use its unique investigative authority to expose other illegal financial transactions in an effort to deter this type of activity."

At the sentencing hearing, U.S. District Court Judge James Robart told Poff that he had "criminally tried to take advantage of the housing market." Judge Robart also noted that Poff adheres to the 'Sovereign Citizen' movement that "says things like 'I don't need a driver's license, I don't need insurance, I don't have to follow the law.'" The judge said Poff's filings in the case were mostly "gobbledygook and fiction."

Four other defendants in the case were previously sentenced for their role in the scheme. They include Humberto Reyes-Rodriguez, 43, of Federal Way, Wash., a licensed real estate agent and mortgage loan originator sentenced to 51 months in prison and more than $1 million in restitution; Alexis Ikilikyan, 30, of Auburn, Wash., a licensed real estate agent and loan originator, who was sentenced to 28 months in prison.

Micki S. Thompson, 55, of Tacoma, Wash., acted as a closing officer for many of the fraudulent sales and received 18 months in prison for her role. Mario A. Marroquin, 39, of Kent, Wash., acted as a straw buyer and oversaw fictitious home repair companies and received probation.

During this investigation, HSI received significant assistance from Becky Carnell, financial investigator for the U.S. Attorneys office for the Western District of Washington. The case was prosecuted by Assistant U.S. Attorneys Sarah Vogel and Michael Scoville.