Politically connected SF real estate investor Makras indicted for bank fraud

“Guy in every room for every mayor” is latest indicted in federal corruption probe

San Francisco /
Oct.October 26, 2021 02:54 PM
Politically connected SF real estate investor Makras indicted for bank fraud
Victor Makras (Getty, iStock)

A web of charges stemming from a federal probe into public corruption in San Francisco has caught another fly.

Victor Makras, a real estate investor once described as “the guy in every room for every mayor,” was indicted last week on claims of bank fraud and conspiracy to commit bank fraud in a loan scheme that tied him to Harlan Kelly, the former head of the San Francisco Public Utilities Commission, who already faces five counts of bribery.

Kelly and Makras are charged with conspiring to defraud Quicken Loans when Kelly and wife Naomi, who was the San Francisco City Administrator until she resigned earlier this year, applied for refinancing. Kelly faces up to 20 years in prison on each of five bribery charges and both men face as much as 30 years behind bars on each of the two fraud charges, according to the San Francisco Chronicle and the indictment.

“In applying for the $1.3 million 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,” according to a statement from the U.S. Attorney’s Office. “That falsely inflated amount allowed Kelly to obtain an increased amount of loan funds from Quicken Loans and at a lower loan rate.”

The indictment goes on to link a portion of the loan to money Kelly owed “Contractor #1,” whom as the San Francisco Chronicle noted earlier, seems to resemble permit expediter and construction firm executive Walter Wong, who has pleaded guilty to money laundering and conspiracies to commit honest services fraud.

The City Attorney’s office has called Wong “the connecting thread” between alleged misconduct in three city departments. In addition to Kelly in the SFPUC, corruption charges were filed last year against former Public Works head Mohammed Nuru and former Department of Building Inspection head Tom Hui.

The case has also brought down higher-ups at Recology, the city’s recycling and trash company, which admitted paying Nuru $900,000 in bribes and last month agreed to $36 million in federal fines.

The fraud claims were the first to be brought against Makras. His firm, contacted by phone on Tuesday, declined to comment.

In addition to throwing fundraisers in his home for Mayor London Breed, Makras also served as a PUC Commissioner and a San Francisco Port Commissioner and sat on the San Francisco employees retirement board. Last year, he quietly declined to be reappointed to the Ports position after concerns about ethics violations when he took part in discussions and a vote on the redevelopment of Mission Rock, which abuts a condo building in which he has invested.

In text messages cited in the indictment, Kelly asked Makras for a $70,000 personal loan in 2013, about a year after Makras Investors loaned $715,000 to Kelly and his wife for an extensive remodelling of their home.

A few days later, Makras responded, “After thinking about it A bit [sic], I recommend that I pay your credit cards directly. This will avoid a large check going into your account, Then [sic] needing to explain it to the bank. Banks do not like seeing anything unusual about the flow of cash in and out of checking savings accounts. This will make the loan process go easy.”

Kelly agreed and a few days later Makras sent about $70,000 from his bank account to pay off the couple’s credit card debt.

Further texts describe how Kelly asked Makras to “cash out 200K” for “money received and money owed” as well as his wife’s student loans: “If you can put in a note saying I owe it all good!”
In response, the indictment alleges that Makras backdated the initial loan to include the new infusion of cash and later falsely stated that the balance owed to Makras Investors was $915,000.

Kelly and his wife then took the falsified information to Quicken when they applied for a $1.3 million refinancing on their home. The Kellys used the funds to pay off their original home loan from JPMorgan Chase & Co., the $715,000 actually owed to Makras Investors and the $70,000 personal loan.

Makras kept the remaining $130,000 from the Quicken loan in his bank account and used it to pay “Contractor #1,” other contractors at the Kelly home and more Kelly credit card bills.

In April 2015, Kelly texted Makras to say that he estimated he had about $10,000 left in the account and wanted $16,000. “The remaining balance goes to duckhorn cab,” he wrote, a reference to a Napa Valley vintner whose cabernet sauvignons often sell for more than $100 a bottle.

The objectives of the subterfuge were largely to “obtain additional funds from Quicken Loans at a lower interest rate than would have been charged for a cash-out loan” and to conceal the Kellys existing debts from the lender, according to the indictment.

Kelly pleaded not guilty to the bank fraud and earlier bribery charges, which in addition to prison time comes with more than $2 million in potential fines. Makras will be arraigned in November.





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