A North Bend man has been indicted on charges of wire fraud for allegedly participating in an $8.5 million mortgage fraud scheme.
Isaac Palmer, 42, had an initial U.S. District Court appearance last Thursday, June 19. He pleaded not guilty, and was put in jail pending a detention hearing scheduled for Monday, June 23.
Palmer is accused of conspiring with other Seattle-area defendants to defraud financial institutions while “flipping” dozens of houses in 2004 and 2005.
According to the United States Attorney’s Office, the conspiracy involved buying homes, then flipping them at inflated prices to “straw buyers,” who were recruited to pretend to buy the houses as their residences. The conspirators allegedly falsified documents to secure the loans, then split the money from the fraudulent mortgages. The straw buyers defaulted on the loans, and the homes were foreclosed, resulting in big losses for lenders.
Palmer, who operated a company called GMI Construction, allegedly recruited straw buyers, and falsely claimed that some of them worked for him so they could qualify for loans.
The indictment didn’t include details on all the homes involved; U.S. Attorney’s Office spokeswoman Emily Langlie said it was possible that some were located in the Snoqualmie Valley.
Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.
The indictment was part of the Department of Justice’s “Operation Malicious Mortgage,” which has resulted in 144 cases nationwide targeting lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes.
Other defendants in Palmer’s case include Brandt and William Anderson, 47, of Bellevue, Mustafa “Marc” Khosraw, 46, of Sammamish, Kristyn Jupiter Moss, 38, of Tacoma and Zachary Joseph Namie, 30, of Seattle.