Two real estate companies are facing federal charges for allegedly defrauding nearly 20 investors. The two men are accused of raising money to renovate an apartment in West Seattle, but using the money for personal expenses and other business ventures.
A federal grand jury this week indicted Paul Waln, 58, and Tamara King, 54, who were once married, on charges of conspiracy, wire fraud and money laundering. The FBI investigated the case, according to the U.S. Attorney for the Western District of Washington.
The government alleges that the couple repeatedly transferred funds from the investment fund Halcyon to other companies and personal accounts until Halcyon’s investors were no longer repaid, and then lied to investors about the reasons for the financial losses. There is.
The couple, who previously lived in Bellevue and Kirkland, married in 2013 and divorced in 2018, prosecutors said. Mr. Waln currently lives in Dallas and Mr. King lives in Toledo, Ohio, the U.S. Attorney’s Office said.
Brad Bursis, an attorney representing Waln, said Waln “maintains his innocence at this time,” but declined to comment further. Dr. King and his attorney could not be reached for comment Friday.
According to the indictment, Waln raised more than $2 million from investors from 2009 to 2013 and used the money to purchase, renovate and manage 23 apartments and potentially other properties in West Seattle. promised. Prosecutors said he required investors to keep their money in investment funds for 10 years, after which he promised to pay them back and give them an estimated annual return of 20%. Another Walns company would manage the investment fund for a monthly management fee.
According to U.S. prosecutors, a total of 22 people, mostly Seattle residents, made the investments. Halcyon purchased the West Seattle building in October 2009.
According to the indictment, Waln and King began a personal relationship in the summer of 2012 and planned to “collaborate on real estate projects.” The indictment says they agreed to put the joint venture in King’s name because Waln had business, personal and tax debts. According to the indictment, King formed a new company in 2013, and the two appointed the company as the manager of the Halcyon investment fund, giving them the right to receive a monthly management fee.
In 2014, the couple allegedly began sending money from Halcyon to other companies and personal banks. account.
The two sold the West Seattle building in 2015 for about $2.4 million, but allegedly transferred the money to other companies and personal bank accounts without disclosing it to investors.
Prosecutors said Mr. Waln and Mr. King used some of the proceeds from the sale of the buildings to build two homes in Kirkland, but they stopped paying contractors for the projects and sold them unfinished. The sale proceeds were reportedly repurposed.
By December 2018, the indictment says, the couple had “claimed all of Halcyon’s assets to themselves.” “Defendants knew that the original 10-year investment period was about to expire and that the members expected to be repaid soon.”
Waln allegedly emailed investors to inform them that a contractor on the Kirkland project had been diagnosed with lung cancer, forcing the investment fund to sell the project “as is” at a loss. Prosecutors said Mr. Waln assured investors that the investment fund expected a 20% return on investors, but that he would take two to three more years. The contractor had never been diagnosed with cancer, according to the indictment.
In October 2019, King finally told investors that the fund’s projects “failed despite good intentions to succeed.”
“Unfortunately, due to losses from multiple failed projects, I have no financial capital left to return the invested funds to you,” she wrote, according to the indictment.
Mr. Waln and Mr. King are scheduled to appear on the arraignment Thursday morning in federal court in Seattle.