Prominent Florida real estate investor Sonny Kim was sentenced to 41 months in federal prison and ordered to pay back more than $5 million in proceeds generated from his illegal activities. The mortgage fraud scheme included elements of mail fraud, bank fraud, wire fraud and money laundering that led Kim to plead guilty in U.S. District Court. The conviction is part of a wide ranging effort by state and federal authorities to curtail rampant mortgage fraud throughout the state.
Kim was accused of facilitating fraudulent real estate transactions where he purchased properties for investment and claimed to be flipping them to residential homeowners. The mortgage applications filed by these potential buyers fraudulently claimed that they intended to live in the homes. In truth, the buyers were often hand-selected by co-conspirators and had no intention of ever residing in the homes. In some cases, false information was provided concerning reported income in order to secure more favorable treatment from the banks.
The buyers in this plan were recruited and were generally paid off for their services. The scheme extended to include the use of specific appraisers, falsified down payment information, and illegal kickbacks to ensure that the real estate closings were completed quickly. It involved many people, but the conspiracy centered on Kim's role as the seller of these investment properties.
The FBI and IRS led the investigation into the transactions that occurred from 2005 to 2008. A minimum of 48 of the transactions led by Kim during this time period involved fraudulent acts. It is not clear whether other participants in the conspiracy will face criminal charges.
Source: LoanSafe.org, "Sonny Kim: Florida Property Investor Gets 41 Months Prison for Mortgage Crimes," Moe Bedard, 27 May 2011