Sometimes The Wheels Of Justice Turn In Fits And Starts-- Will Republicrook Thomas "Gus" Kontogiannis Rat Out Ken Calvert?

DownWithTyranny has been following the criminal escapades of Thomas Kontogiannis ever since he attempted to buy a pardon from George W. Bush for $400,000, most recently when a former Kontogiannis associate wrote a guest post on the imprisoned gangster. 

Far from a household name, Kontogiannis has been bribing public officials and showering ill-gotten loot on Republicans for decades. He's best known nationally as the man whose bribes sent Congressman Randy "Duke" Cunningham (R-CA) to the federal penitentiary. But there's so much more to Kontogiannis than just bribing sleazy pols like Bush and Cunningham. He was at the very forefront of the nascent mortgage meltdown and the foreclosure crisis. When Republicans talk about "freedom" and about "liberty," it's always, always, always about the freedom and liberty of sociopath goons like Kontogiannis to prey on society without interference from government or any countervailing forces working to protect consumers and workers-- the law of the jungle.

Yesterday Businessweek reported that Kontogiannis, already serving a prison sentence for the Cunningham scandal, pleaded guilty for his role in an unrelated real-estate swindle.

Kontogiannis, 61, pleaded today in federal court in Brooklyn, New York. He led a scheme to defraud Washington Mutual Inc. and Credit Suisse Group AG’s DLJ Mortgage Capital in connection with the development of properties in Brooklyn and Queens, New York, said prosecutors in the office of U.S. Attorney Loretta Lynch.

“I used the funds generated by the fraudulent transactions primarily to finance the construction of ongoing real-estate development projects,” Kontogiannis told U.S. District Judge Kiyo A. Matsumoto. “While I never intended to cause any financial loss to any financial institution, I knew that the means I was using to obtain these loans was wrong.”

Nine people were indicted in the case last year, accused of obtaining multiple mortgages and staging repeated sales of the same properties to straw buyers to obtain the home loans. The fraud began in March 2003 and ran until September 2007, prosecutors said. Three defendants pleaded guilty earlier this year and one has died.

Kontogiannis, who admitted to conspiracy to commit bank and wire fraud, previously pleaded not guilty in the case in June 2009. The conspiracy count carries a maximum sentence of 30 years in prison, Matsumoto said in court.

...Kontogiannis is serving a sentence of eight years and one month for helping to launder Cunningham’s bribe money through fraudulent mortgages that allowed the former congressman to buy a $2.4 million mansion in Rancho Santa Fe, California. Kontogiannis was sentenced in San Diego in May 2008.

Cunningham, a California Republican, resigned from Congress after pleading guilty in 2005 to taking $2.4 million in bribes from defense contractors. He is serving a sentence of eight years and four months.

The defendants in the Brooklyn case also allegedly obtained permits to construct multi-unit housing in Queens and Brooklyn and, to finance the projects, subdivided the land tracts and staged sales of the properties financed by the mortgage loans, the U.S. said.

They are accused of preparing false loan filings to create the appearance the properties were being purchased by credit- worthy individuals.

One defendant provided fraudulent appraisals to support the price of the properties, even when no buildings existed or had fictional addresses, prosecutors said.

Kontogiannis “controlled every aspect of the mortgage-lending process,” Lynch said in a statement today.

Loans were financed by lenders controlled by Kontogiannis and later sold to Washington Mutual and DLJ, prosecutors said. The defendants stopped making the mortgage payments in 2007 with about $92 million in principal outstanding on the fraudulent mortgages, the government said.

Sound complicated? The Wall Street Journal summed it up in a very straightforward paragraph yesterday. Kontogiannis, as our informer first revealed last month here at DWT, 

employed family and workers who acted as straw buyers on properties he owned and directed false loan files. The mortgages included false appraisals and other documentation. After the loans closed, Kontogiannis prevented the mortgages and deeds from being recorded, so he could sell the same property repeatedly. He eventually sold the loans to Washington Mutual or the Credit Suisse unit DLJ Mortgage Capital Inc. 

It is widely believed that he's busy ratting out some of his criminal conspirators, including a crooked nephew, John T. Michael, and possibly even one of his shady daughters! The question, of course, is how far up the food chain he's willing to go. While no one expects him to turn state's evidence against Bush, he could certainly send Cunningham-crony congressman Ken Calvert to prison for a good long time. Kontogiannis arranged for a meeting in Saudi Arabia with that country's future king for Cunningham, Calvert, himself and Ziyad Abduljawad, another sleazy operator, late in 2004. 

Calvert has acted as a Saudi agent inside Congress, although he has gone to great lengths to claim he has no involvement with Kontogiannis other than one trip on a private jet to meet with members of the Saudi royal family-- paid for by a known Saudi intelligence operative. When Fox News revealed that Calvert is probably the single most corrupt Member of Congress, they concentrated on his record of real-estate fraud and ignored his arrest record as a sexual predator and deadbeat dad and his involvement with the Saudis. Kongtogiannis could help make the latter case if he chooses to.

Blue America has endorsed Calvert's opponent, Bill Hedrick, and we even have a page especially dedicated to Calvert's one-man crime spree where you can donate to Hedrick's campaign.