Mortgage brokers convicted of fraud, money laundering

Pacific Business News

Date: Wednesday, December 21, 2011, 6:04am HST

Welton Kalani, co-owner of Accel Mortgage LLC, and Stephen Balino, owner of New Horizons Financial, have been found guilty on numerous counts of mortgage fraud and money laundering, according to the U.S. Department of Justice.

Pacific Business News is reporting that the two Honolulu mortgage brokers encouraged struggling homeowners to surrender the title of their homes while allowing them to remain as renters until the homeowners could buy back the properties.

Meanwhile, Kalani and Balino recruited people to serve as buyers for the homes in question and helped those people obtain loans by falsely claiming they would live on the properties. The false loan applications were supported by fraudulent documents produced by people working with Kalani and Balino.

Following each sale, the brokers were paid fees and commissions for procuring the loans, and the equity was diverted away from the sellers and distributed by third parties back to Kalani, Balino and others working with them.