2 Honolulu mortgage brokers found guilty of fraud, money... - Hawaii News Now - KGMB and KHNL

2 Honolulu mortgage brokers found guilty of fraud, money laundering

HONOLULU (HawaiiNewsNow) - Two men were found guilty of offenses stemming from a mortgage fraud and money laundering scheme on Friday following a nine-day trial.

According to the U.S. Department of Justice, Welton Kalani, 48, was found guilty on 12 counts of conspiracy, mail and wire fraud, obstruction of justice and money laundering.

Kalani's accomplice, 51-year-old Stephen Balino, was found guilty of seven counts of conspiracy, mail and wire fraud, making false statements on loan applications, and money laundering.

According to information produced in court, Kalani and Balino owned mortgage brokerage companies offering loans to the public. Kalani was the co-owner of Accel Mortgage, LLC and Balino was the owner of New Horizons Financial in Downtown Honolulu.

Court evidence showed that Kalani, Balino and others offered homeowners in financial troubles an opportunity to stay in their homes rent free by transferring title to others temporarily.

Kalani and Balino promised the homeowners that a "buyer" would purchase the property and make the mortgage payments until the homeowners were able to buy back the property.

The two men then recruited others to serve as "straw buyers" by promising them money to induce them to create false loan applications to fund the false purchases.

Trial evidence focused on three transactions involving the sale of two properties in Aiea and Mililani.

According to the USDOJ, the brokers were paid fees and commissions for procuring the loans following each sale. The equity in the property was also diverted away from the seller and channeled through third parties to Kalani, Balino and individuals working for them.

Evidence showed that in the three sales, the conspirators diverted $98,000, $78,000 and $51,000.

The USDOJ says eight other individuals pleaded guilty to charges stemming from the same transactions and testified during the trial. Five of those individuals worked with Kalani at Accel Mortgage, which is no longer in business.

Sentencing is set for April 26, 2012 before United State District Judge Leslie Kobayashi.

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