Local man pleads guilty of bilking banks of $3.6 million

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John Andreas Tsiaoushis, 40, of Alexandria pled guilty last week to a two-count information charging him with mail fraud affecting a financial institution and giving false testimony at a hearing in the United States Bankruptcy Court.

Chuck Rosenberg, the United States Attorney for the Eastern District of Virginia made the announcement in Alexandria after the plea was accepted by United States District Judge Liam OGrady.

Tsiaoushis faces a maximum penalty of 30 years in prison, 5 years supervised release, and a fine of approximately $7.6 million when he is sentenced on July 18. As part of the guilty plea, Tsiaoushis agreed to the entry of a Restitution Order. The government estimates the amount of restitution due to be about $3.8 million.

Tsiaoushis admitted to operating a mortgage fraud scheme between December 2004 and November 2007.

According to court documents, Tsiaoushis fraudulently attempted to obtain an estimated $4.3 million and successfully obtained an estimated $3.6 million through the scheme.

Court documents also indicate that, while the mortgage fraud was ongoing, Tsiaoushis engaged in a check kite scheme through which he obtained an estimated additional $163,500 by overdrawing his accounts with several Virginia banks.

To carry out the mortgage fraud, Tsiaoushis transferred or refinanced two Virginia residential properties, one located in Vienna and one located in Alexandria, on six occasions.

In applying for loans, he provided the would-be lenders with false documentation, such as false loan-payoff statements purporting to be from current mortgagees, and false Certifi-cates and Affidavits of Satisfaction purporting to be from prior mortgagees.

He then arranged for the loan proceeds to be misdirected to himself by causing the title companies closing the loans to send checks for the proceeds, which were ostensibly to be used to pay off pre-existing mortgages on the properties, to false addresses. In reality, the addresses were commercial mail drop boxes that had been opened by friends, associates, and family members. Tsiaoushis diverted much of the money to businesses in which he had ownership interests.

Tsiaoushis, who had filed for bankruptcy with the United States Bankruptcy Court for the Eastern District of Virginia in October 2005, also admitted to giving false testimony in a hearing before that court about selling one of the residential properties involved in the mortgage fraud scheme.

Khalil Salim Arbid, an associate and former driver for Tsiaoushis, was sentenced on April 4 by United States District Judge James C. Cacheris to 16 months in prison, 3 years supervised release, and ordered to pay $650,000 in restitution for his role in the scheme.

The case was investigated by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the U.S. Secret Service and Small Business Administration. Assistant United States Attorney Thomas H. McQuillan and Special Assistant United States Attorney Dennis Early of the Office of the United States Trustee are prosecuting the case for the United States.

 

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