A San Francisco real estate investor with political ties was found guilty of bank fraud and making false statements to Quicken Loans as part of a larger federal investigation targeting public corruption in the city.
A federal jury convicted Victor Makras, president of Makras Real Estate, for inflating a debt amount of $915,000 in a $1.3 million refinance mortgage loan secured by property owned by an associate of Makras Real Estate, according to the Department of Justice on Friday.
The verdict follows a DOJ indictment in October 2021 when Makras and Harlan Kelly, former San Francisco Public Utilities Commission director, “conspired to defraud Quicken Loans, the financial lending institution, in a $1.3 million real estate loan to Kelly.”
In applying for the loan, Kelly and Makras represented to Quicken Loans “a falsely inflated debt amount that Kelly owed on his existing real estate loan to Makras Investors,” the DOJ said. “That falsely inflated amount allowed Kelly to obtain an increased amount of loans funded from Quicken Loans and at a lower loan rate.”
Makras’ firm’s $715,000 loan to the Kellys paid off, according to the indictment. Other outstanding debt included more than $89,000 the borrower owed to a contractor for extensive remodel work on the property and a $70,000 personal loan from Markras to the borrower, the DOJ said on Friday.
While the jury convicted Makras of making false statements to a bank and bank fraud, it wasn’t able to reach a verdict on two other counts – conspiracy to make false statements to a bank and a conspiracy to commit bank fraud. Markas was on the San Francisco Public Utilities Commission, San Francisco Port Commission and San Francisco Employees Retirement System Board.
He faces a maximum possible penalty of 30 years imprisonment and a $1 million fine for each of the two counts the jury convicted on Friday. Makras remains out of custody pending sentencing and no future date has been set.
This case is part of a larger federal investigation targeting public corruption in the city and county of San Francisco, the DOJ said. Most recently, Mohammed Nuru, the former head of San Francisco Department of Public Works was sentenced to seven years in prison after pleading guilty to fraud in January and admitting to taking bribes from city contractors such as Recology.
According to the DOJ, 12 individuals have been charged including city contractors and facilitators.
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