SEATTLE - Eliza Bautista landed herself in handcuffs on Tuesday, four years after the KING 5 Investigators exposed a scheme she orchestrated where she sold homes, loans and promises that were bogus to naïve home buyers.
Mary Pelayo of Bellevue was one of Bautista’s victims in 2006. She was astounded when KING 5 told her that her former mortgage broker had been arrested by federal agents.
"I'm shocked. I would never have thought this day would come. We gave up hope. We thought she got away with it," said Pelayo. "I hope she goes away for a long time and has a long time to think about all the hurt that she put our families through. Not just mine but all the other families involved in this."
Four years ago, Pelayo was featured in a KING 5 News story which showed that the home she thought she and her family had purchased in Shoreline actually wasn’t theirs at all.
Three months after moving in, the Pelayos had to move out.
"We lived in this house for over three months. We thought this was our home. We started fixing it up. We put a lot of money into it (and) a lot of work. And then to find out it's not ours!" Pelayo told us.
Unbeknownst to them, their mortgage broker, a polished Eliza Bautista, had secretly stolen another client's social security number and good credit scores. Bautista used that information to buy a home for the Pelayos, who had shaky credit.
KING 5 found Bautista had done this several times with other unsuspecting clients. After the KING 5 Investigation aired, the FBI and the U.S. Attorney’s office took on the case.
Suddenly, after all this time, they charged Bautista on Tuesday with the crimes we exposed in 2006: Two counts of wire fraud, one count of mail fraud, and one count of the misuse of a social security number.
When KING 5 originally aired the story, the reporters exposed how Bautista preyed on inexperienced, first time home-buyers, such as the Pelayos. Many of the victims were people she’d met through church, where she was a well-established and well-respected leader.
The federal indictment handed down by the grand jury outlines the same mode of operation:
“Bautista was able to accomplish this scheme on repeated occasions … because she controlled the other parties’ access to accurate information throughout the application and closing sequences. That is, the current clients, due to their unfamiliarity with the borrowing process, relied on (Bautista’s) assurances that everything was proceeding routinely and traditionally.”
The indictment goes on to say:
“Bautista’s former clients were entirely unaware that their personal and financial information was being misused; they did not personally participate in the application or closing activities.”
“It took a long to get to this point, but we believe justice will be served,” said David Seaver, a Special Assistant U.S. Attorney who worked on the case. “This is a particularly troubling case because of the number of people victimized, the people who thought they were realizing the American dream of purchasing a home and the people who trusted Eliza Bautista with their most private, personal financial information, only to have trust betrayed. We’d like to thank KING 5 for bringing the case to our attention."
Financial experts tell us these kinds of transactions are exactly what helped to put the economy in its current, ailing state. Bautista was securing loans with nothing more than stating fictitious incomes. She used so-called “liar loans” - a product where lenders don’t ask questions or review the backgrounds of potential borrowers.
None of the lenders Bautista used in the scheme is in business today.
It took four years to bring charges against Bautista because the investigation began at the FBI, then was transferred to the Social Security Administration. Other cases took priority, but the federal investigations finally led to an indictment handed down by a grand jury this month.
Upon hearing the news of the arrest and charges, Pelayo had a message for her former mortgage broker, Eliza Bautista.
"I'm glad to see your day in court has finally come. You had four years of freedom and we've had four years of rebuilding our lives. I hope you get put away for a long time," said Pelayo.
Bautista faces a maximum of 20 years in prison if convicted of the mail and wire fraud charges. Her trial is scheduled to begin in October.
Agencies involved in the indictment and arrest of Bautista include the FBI, the Social Security Administration, The Washington State Department of Financial Institutions, the U.S. Attorney’s Office and the King County Prosecuting Attorney’s Office.
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