United States Attorney Jenny A. Durkan
Western District of Washington
Seattle ‘Hard Money’ Lender Convicted Of Five Counts Of Mail Fraud For Investment Fraud Scheme
Defendant Defrauded Investors of Millions of Dollars with False Promises
The owner of a Seattle lending business, Hoss Mortgage Investors, was found guilty late Friday of five counts of mail fraud, announced U.S. Attorney Jenny A. Durkan. TODD HOSS, 47, of Seattle, Washington lied to a number of investors about how their money would be used in a variety of development projects. HOSS represented that the money would be secured by specific liens on properties with appropriate reserves. In fact, there were no liens for the investors and much of the money was used simply to pay off other investors like a ponzi scheme. The jury deliberated about three hours following a ten day trial. HOSS is scheduled to be sentenced by U.S. District Judge Ricardo S. Martinez on June 22, 2012.
According to records filed in the case and testimony at trial, from 2007 to 2009, TODD HOSS operated Hoss Mortgage Investors (HMI). HMI extended short-term loans to commercial property developers who otherwise did not qualify for conventional bank loans. HMI funded these loans with money HOSS solicited from individual investors. HOSS made specific promises to the investors about the security of their loans and repayment. But the promises were lies. Instead, HOSS diverted investor funds to pay for undisclosed and unauthorized business and personal expenses and to pay investors for prior, unrelated loans. In some instances, HOSS sold investors loans that simply did not exist, and failed to pay back investors their principal when a loan paid off or was cancelled. The evidence shows that HOSS diverted more than $2 million for his personal expenses.
Prosecutors told jurors in closing arguments that “Todd Hoss was exploiting years of trust he had built up with these people, to line his own pocket with over a million dollars… He exploited a lack of investor knowledge for his own greed.”
“This case proves once again, the US Postal Inspection Service is sworn to preserve and protect the sanctity and security of the mail,” said Inspector in Charge Bradley Kleinknecht, “We are committed to ensuring that the public’s trust in the US Postal Service is upheld, by aggressively investigating those who violate that trust.”
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine.
The case was investigated by the United States Postal Inspection Service (USPIS), and the Washington State Department of Financial Institutions.
The case was prosecuted by Assistant United States Attorneys Kathryn Kim Frierson and Special Assistant United States Attorney Steven Hobbs. Mr. Hobbs is a Senior Deputy King County Prosecutor specially designated to prosecute cases in federal court.