A former Eastside real estate broker was convicted on Friday of an investment fraud scheme that drained more than $2 million from Washington residents, most of whom were from Seattle.
Tamara King and her ex-husband Paul Waln stole investor funds to fuel a life of luxury that included a Bellevue penthouse, a five-bedroom Clyde Hill home, personal assistants, luxury cars, diamond jewelry and cosmetic surgery, according to prosecutors.
In the U.S. District Court in Seattle, a jury found King, also known as Tamara Waln, 56, of Toledo, Ohio, guilty of conspiracy to commit wire fraud and multiple counts of wire fraud, money laundering and tax fraud.
Her ex-husband and co-defendant Waln, 60, now of Dallas, pleaded guilty to the wire fraud conspiracy in June and was sentenced to 33 months in prison.
The couple previously resided in Bellevue and Kirkland, where Waln solicited investments for real estate projects between August 2009 and December 2013, the U.S. Attorney’s Office wrote in a news release. Specifically, Waln told investors their funds would be pooled to purchase and renovate an apartment building in West Seattle.
Twenty-two investors contributed a total of $2.25 million to the fund, called Halcyon, according to the U.S. Attorney’s Office.
Investors were required to leave their money in the investment pool for 10 years. Waln, who was supposed to receive a 1% management fee, said investors would receive an estimated 20% annual return at the end of the 10-year period, the release said.
In 2013, Waln and King married and began jointly managing the investment fund. Between February 2014 and December 2018, the couple transferred hundreds of thousands of dollars at a time from the fund to their management company, according to the U.S. Attorney’s Office. They’d then move the money to King’s personal accounts.
King took $50,000 for an eight-and-a-half-carat diamond ring and more than $120,000 to buy a Tesla, according to prosecutors.
Although some of the transfers were disguised as loans, the couple never repaid the funds or told investors they took money, the release said.
Over three tax years during this period, King reported $188,116 in total income, when she actually received $1.85 million.
Investors expected Waln and King to distribute the investment funds to investors in 2019. But by the end of 2018, the pair had misappropriated all the money, the news release said.
Waln sent investors a letter explaining that the fund’s general contractor had been diagnosed with cancer, which would result in a years-long delay before the money could be returned. The contractor never had cancer, the U.S. Attorney’s Office said.
In fall 2019, King told the investors that the money was gone and the investment had failed.
Investors lost a total of $2.4 million.
“She blindly drained every last dollar,” Assistant United States Attorney Cindy Chang told jurors, according to the news release.
At trial, King blamed Waln for the misappropriation, claiming her ex-husband told her loans were allowed. But the couple acted as a team, Assistant United States Attorney Seth Wilkinson told the jurors.
Waln “brought the money in the front door, and King stole it out the back,” Wilkinson said.
King’s sentencing is scheduled for March 20.
“There are a number of legal issues that will be appealed in this case,” Colleen Fitzharris, one of King’s attorneys, said.
King faces up to 20 years in prison for conspiracy to commit wire fraud and wire fraud, up to 10 years in prison for money laundering and up to three years in prison for filing a false tax return, according to the U.S. Attorney’s Office.