6 in Seattle area indicted in "Malicious Mortgage" crackdown

Six Seattle-area people have been indicted by a federal grand jury in connection with "Operation Malicious Mortgage," a national takedown on mortgage fraud schemes that has resulted in more than 400 arrests nationwide and losses estimated at more than $1 billion — nearly $8.4 million in the Seattle case alone.

Those indicted included a disbarred lawyer, a former bank loan officer and a mortgage broker, according to the U.S. attorney's office. Others include the owner of several shell corporations who "flipped" houses as part of a scheme using unqualified "straw" buyers who allowed inflated loans to be made in their names, only to default on the mortgages, the indictment alleges.

The case is among 144 prosecutions involving 406 people nationally. More than 60 arrests were made Wednesday, the Department of Justice announced.

Among them was Robert Ernest Brandt, 40, a former Bothell attorney who was disbarred in 2006 for failing to properly maintain his client escrow accounts. According to the Washington State Bar, more than $3 million turned up missing from the accounts.

The indictment alleges that Brandt conspired with several others to "flip" houses in Seattle's red-hot real-estate markets in 2004 and 2005, using the shell companies to buy the homes. The alleged conspirators would create loan papers for the straw buyers for inflated purchase prices and pay them up to $20,000 to sign the papers. The loans would not be paid and the banks would foreclose for a loss.

Also indicted were William Anderson, 47, of Bellevue; Mustafa "Marc" Khosraw, 46, of Sammamish; Isaac Palmer, 42, of North Bend; Kristyn Jupiter Moss, 38, of Tacoma; and Zachary Joseph Namie, 30, of Seattle.

Anderson purportedly operated the shell companies that purchased the homes; Moss was a loan officer at Viking Bank and helped create the fraudulent documents; and Brandt and Anderson ran a business called "Escrow Authority" that closed on the sales. Khosraw was a mortgage broker and Namie a loan officer who helped falsify documents, according to the charges. Palmer operated a construction firm, helped recruit straw buyers, and lied that some of them worked for him so they could qualify for loans, the indictment alleges.

In announcing the crackdown, Deputy Attorney General Mark Filip said the Department of Justice is committed to prosecuting mortgage fraud, which he called "a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind of millions of American homeowners."

Mike Carter: 206-464-3706 or mcarter@seattletimes.com