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Predatory lender sentenced to 8 year | U.S. District Court

October 28, 2012 · 6:31 PM
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The owner of a Seattle lending business, Hoss Mortgage Investors, was sentenced today to eight years in prison, three years of supervised release and $4.2 million in restitution for 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.  In April 2012, HOSS was convicted following a ten-day trial.

At sentencing, U.S. District Judge Ricardo S. Martinez noted that many of HOSS’ victims were elderly and trusted HOSS because they had invested with his father.  “Your fraud is a crushing blow to these elderly victims,” Judge Martinez said. “They didn’t sign up to be sacrificed on the altar of your greed.  You treated them like sheep waiting to be shorn so you could wear wool.”

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.”

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.


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