|Photo: Ken Lambert/The Seattle Times
|“I am a wolf”: Emiel Kandi, 34, has made hundreds of thousands of dollars in a lending industry with few consumer protections. Now he’s in the medical marijuana business.
Operating Cobra Medical Group, a medical marijuana dispensary in Tacoma, Washington, isn’t Emiel Kandi’s only business. The former mini-casino operator also charges desperate people as much as he can get away with — up to 45 percent interest, in one case — in deals set up so that he can quickly take borrowers’ homes, and in some cases, flip them for a profit.
Unsophisticated borrowers trying to avoid financial collapse or foreclosure then lose their property, reports Christine Williamson of The Seattle Times
. “I am a wolf,” Kandi, 34, said to the paper.
“He’s in the business of taking people’s property,” said Martin Burns, a lawyer who sued Kandi on behalf of an unemployed mechanic. “He finds vulnerable people and exploits them.”
“I’m not your friend,” Kandi said. “If you step off the tightrope, I’ll take your house.”
A Seattle Times examination of numerous Kandi loan deals showed that they take advantage of lax regulations in the lending industry, which provide little protection for consumers.
Kandi knows this, and skirts mortgage requirements and disclosures by writing up his loans as “commercial,” the Times reports. Mortgages have interest-rate caps, consumer protections and full disclosure of all costs, while commercial loans do not.
The State of Washington doesn’t regulate commercial loans and the “hard-money” industry. There are no registrations, licenses or education requirements for the lenders.
Regardless of what Kandi calls his loans, Burns and others say they are really mortgages, and the borrowers should have been protected by state regulations.
But self-described “wolf” Kandi disagrees. “They borrowed money at an exorbitant rate and cried foul when they couldn’t pay it back,” he said. “Everyone who borrows from me is desperate — that doesn’t change the fact they knew the terms of the deal prior to signing.”
One single mother of two children took out a loan for $5,000 from Kandi, missed a payment, and lost her home and $70,000 in equity, according to the Times.
To get one of Kandi’s loans, there is no application, no proof of employment required and no credit check. That’s why Kandi is the lender of last resort for some people who have been turned down by banks because of poor credit or limited income. He said his requirement for a borrower is “a pulse and a legal ability to sign.”
After a three-day trial in one case, a Pierce County judge found that Kandi engaged in a scheme to “misrepresent and defraud the plaintiff in a lending process” and used “unfair and deceptive practices.” The judge ordered Kandi to pay $211,538, none of which he has yet paid, according to the Times.
Meanwhile, Kandi claims he is the real “victim,” having to temporarily curtail his hard-money lending business and spend money on legal fees to defend himself in several lawsuits related to his allegedly deceptive lending practices.
Although several plaintiffs have actually won against Kandi in court, according to the Times, none have collected, and they cannot go after Kandi’s assets since he seems to have no properties under his own name. Even if they could find assets, they’d have to get in a long line, according to the Times. There are several unpaid judgments against Kandi, including nearly $1 million to the IRS.
And Kandi’s latest business — Cobra Medical Group
, the Tacoma marijuana dispensary, which has 800 clients — is one he sees as a “growth industry,” according to the Times
Kandi said the dispensary was his way of “giving back.”
Some observers believe it is actually another opportunity to exploit a largely unregulated industry with few consumer protections.
According to one report from a Toke of the Town reader, Kandi’s dispensary, Cobra Medical Group, charges $17.50 a gram for medical marijuana. Other dispensaries in the Seattle area typically sell cannabis for as little as $10 a gram.
“The Legislature wrote a bad law,” Kandi said last month after Tacoma threatened to shut his dispensary down, along with the rest of the pot shops in town.
“I’m a creative guy, and I drove a truck through it. But I haven’t broken the law.”
“Dude’s a thug,” a Seattle medical marijuana patient told Toke of the Town. “I don’t want to support him if he’s the face of medical marijuana in town.”
“If there was EVER an undeniable reason that marijuana should be completely legal and regulated, this guy is it!” another patient advocate commented. “A low life thug getting on the dispensary bandwagon… turns my stomach,” she said.