Defendant sentenced to 14 years for bilking Financial Institutions out of $16 Million

By Jennifer Felten

United States v. Vera Kuzmenko

In this case the United States government brought an action against defendant Vera Kuzmenko, a real estate agent, and others, on account of a massive real estate fraud she orchestrated. The scheme involved the defendant obtaining real estate commissions by submitting grossly fraudulent loan applications to lenders on behalf of straw (fake) buyers.  According to the U.S. Attorney’s Office who prosecuted the case, the loan applications contained “materially false” information about the straw buyers’ income, employment, assets and intent to occupy the residences.  In one case defendant served as a straw buyer herself.

As part of the scheme the defendant and her cohorts also targeted distressed property owners, convincing them to agreed that upon sale only the mortgage would be paid off.  The actual sale price submitted to the loan companies (and hence the loan amounts approved by the lending institutions) were inflated by several mechanisms. For example, defendant manufactured higher property values by submitting to the loan company false invoices for purported work that the seller had performed on the property prior to close of escrow, and which were to be paid to shell companies from any proceeds received on the sale. As a result, the value of the house for appraisal purposes was artificially enhanced by the work performed. In reality, no pre-sale work was ever performed, and the entities listed on the invoices were shell companies run by persons who would profit together with defendant for the non-existent work.

Ultimately, of course, the lenders were forced to foreclose on the properties at great loss to the lenders. The government alleged that the scheme cost financial institutions over $16 million.

On December 4, 2015, after a 16-day trial, a federal jury today found defendant guilty of multiple counts of mail and wire fraud and money laundering.  Defendant was also found guilty of witness tampering and money laundering associated with the scheme.  With respect to the witness tampering count, the evidence showed that after defendant learned the FBI was investigating her, she told various witnesses to lie to the FBI and blame a dead woman for the fraud.  On March 15, 2016, United States District Judge John A. Mendez sentenced defendant to 14 years in prison.

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Jennifer Felten

Jennifer Felten, Esq., Relaw Ms. Felten specializes in representing both individuals and legal entities, providing representation and guidance on a variety of real estate related matters.  Relaw APC 699 Hampshire Road, Suite 105 Westlake Village, CA  91361 US Phone: (805) 265-1031 or email her at: [email protected]

Upcoming Speaking Events for Ms. Felten:

April 20, 2016 Ventura County Real Estate Fraud Advocacy Team

For inquiries or questions about any of these events, please email [email protected].

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