Crime - Sacto 911

Rocklin man sentenced to prison in mortgage fraud scheme

A Rocklin man has been sentenced to three years and 10 months in federal prison for his role in a mortgage fraud scheme.

Aleksandr Kovalev, 54, was sentenced Thursday in Sacramento by U.S. District Judge Morrison C. England Jr. He was the last to be sentenced of the nine people who were prosecuted in the case, according to a U.S. Attorney's Office news release.

Kovalev pleaded guilty in November 2016 to wire fraud involving financial institutions in connection with a scheme that included the purchase of at least 31 properties.

Kovalev was in the business of developing, building and selling property in Sacramento, Fairfield and Stockton. As the real estate market began to weaken, he offered to make incentive payments to purchasers through "down payment assistance" or by making other payments to the buyers to be used in whatever manner the buyers wanted, according to the news release.

Most of the payments to buyers were made out of escrow and were often paid through intermediaries, originating in Kovalev's bank account. The payments, which were not disclosed to lenders, had the effect of substantially reducing the sales price below what was represented to the lenders.

Dozens of properties were involved in the scheme, resulting in several million dollars in losses to lenders, the news release said.

The case resulted from an investigation by the Federal Bureau of Investigation and the IRS Criminal Investigation Division.

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