According to a press release by the Department of Justice acquired by Slavic Sacramento, this Tuesday District Judge John A. Mendez sentenced Peter Kuzmenko to 19 years in prison. His accomplice Aaron New was sentenced to 11 years, while Nadezhda Kuzmenko and Edward Shevtsov received 8 years each.
They were defendants in a Sacramento County criminal case involving real estate and banking fraud. In particular, Nadezhda and Vera Kuzmenko were charged with using fictitious buyers to inflate real estate prices.
Vera Kuzmenko, owner of Kuzmenko Tax Services, is awaiting trial which is scheduled on November 2nd. Her sister Nadezhda Kuzmenko is charged with threatening one of the witnesses.
According to the information published by the local FBI office, Nadezhda Kuzmenko, being aware of the investigation, forced witnesses to lie to federal agents and blamed everything on her colleague Miroslava Chekina who recently died in Ukraine. For her crimes Nadezhda will spend 8 years behind bars.
37-year-old Peter Kuzmenko was found guilty of money laundering and mail fraud after a long trial. He was sentenced to 19 years in prison. Aaron New will serve 11 years and 3 months for similar crimes.
According to US Attorney Benjamin B. Wagner, the criminal gang was active between 2006 and 2007. The defendants have acquired more than 30 houses in Sacramento county at a total cost of over 26 million dollars. It was proved during the trial that thousands or even millions of dollars were being pocketed by the gang members.
In his sentencing speech Judge Mendez said that there was “overwhelming evidence of the defendants’ guilt”. He also said that Sacramento County has uncovered a case of “significant fraud”.
Nadezhda Kuzmenko was a real estate agent. Together with her sister Vera she was creating fictitious customers in whose name dozens of houses were purchased.
The sisters made documents with fabricated income, tax and employment information in order to approve bank loans for ineligible clients. They also lied about buyers’ intentions to live in the houses they were purchasing.
Using those fake documents, fictitious buyers acquired high-priced houses and defaulted on their loans a month or two later. Sometimes they took a second mortgage that was divided between the gang members.
Witnesses heard Vera Kuzmenko telling potential customers: “You need money? Buy a house!”. The clients, who were unfamiliar with the housing market and did not speak English very well, purchased real estate at inflated prices. As a result, millions of dollars were pocketed by the unscrupulous sellers.
According to the District Attorney, the owners of the houses did not mind the deal: falling real estate prices made them glad to get rid of their property and stop paying the original high priced mortgages.
The role of Aaron New in this scheme was limited to fabricating questionnaire sheets for loan approvals, as well as mortgage fraud. Besides, Aaron posed as one of the fictitious buyers himself. FBI investigators concluded that New was not aware of the the loan applications being falsified, so he was glad to do business with Kuzmenko sisters and explore “a new market niche”.
Peter Kuzmenko and Edward Shevtsov were recruiting buyers and helping them fill out falsified loan applications. Peter Kuzmenko also posed as one of the fictitious buyers. It is reported that both of them are currently detained.
“These defendants were important players in a network of fraudsters responsible for millions of dollars in losses associated with dozens of inflated property sales using multiple straw buyers, ” said U. S. Attorney Benjamin B. Wagner. “The sentences demonstrate that mortgage fraudsters will not escape accountability for their crime by blaming others. Our enforcement efforts in this area are far from done.”
“While today’s verdict is a victory for justice it does not change the fact that these individuals victimized their community and severely damaged the regional economy with their multi-million dollar fraud scheme,” said Assistant Special Agent in Charge John Gliatta for the FBI’s Sacramento field office. “As in this case, the FBI will vigorously investigate large, complex financial fraud to ensure those who are victimizing the community are brought to justice.”
“Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake, ” said Thomas McMahon, Acting Special Agent in Charge, IRS-Criminal Investigation. “The impact on homeowners and communities is devastating. While nothing can reverse the damage caused by these defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
Rachel Siders, who also took part of Kuzmenkos’ fraud schemes, is currently awaiting trial which is scheduled on November 2nd.