Former Eastside real estate broker receives prison time in fraud scheme

A federal judge in Seattle sentenced a former Eastside real estate broker to 4 1/2 years in prison Friday after a jury convicted her of illegally funneling investors' money to fund her lavish lifestyle.

Prosecutors said Tamara King and her ex-husband, Paul Waln, stole funds investors expected would fund the renovation of an apartment building in West Seattle. A jury in the U.S. District Court in Seattle found King, 56, guilty of wire fraud, money laundering, tax fraud and conspiracy to commit wire fraud in December. Prosecutors said King spent the money on luxuries such as diamond jewelry and a custom Tesla.

Waln, 60, pleaded guilty to wire fraud conspiracy. He was sentenced to nearly three years in prison in October.

Although King's attorneys claimed Waln manipulated King, prosecutors and U.S. District Judge Ricardo Martinez concluded King bore significant responsibility for the scheme.

King was the "primary instigator of this fraud," the judge said during a sentencing hearing Friday, according to a U.S. Department of Justice news release.

According to prosecutors, Waln solicited money from investors between 2009 and 2013, promising a 20% annual return after 10 years. Twenty-two investors, most of them Seattle residents, contributed $2.25 million to the fund, called Halcyon.

After King and Waln married in 2013, they managed the investment fund together and transferred money to their personal company and then to King's personal accounts, according to prosecutors. Meanwhile, King vastly underreported her income to the Internal Revenue Service.

By the time investors expected to be repaid in 2019, the money was gone.

King, who lived with Waln in Bellevue and Kirkland, used more than $120,000 to buy a Tesla with custom pink trim and $49,000 for an 8.5-carat diamond ring, according to prosecutors.

Prosecutors say she also paid off a personal tax debt, paid $6,900 a month to rent a five-bedroom Clyde Hill home, and racked up credit card charges.

For investors, the fraud had a "devastating impact," prosecutors wrote.

One investor, who took out a $175,000 home equity loan to invest in Halcyon, described to the court the stress of "knowing that we wouldn't be able to retire when we originally planned, that we wouldn't be able to build the retirement home we planned for, and that we would have to work 3-5 years more because our investment money was stolen."

Prosecutors argued King "refused to accept responsibility" and told "fantastic lies" during her trial.

King claimed Waln was the true architect of the scheme. "It is the biggest regret of my life that I was used by Paul to defraud investors and did not realize what was happening at the time," she wrote in a letter to the judge.

King's attorneys said in court filings her sentence should not exceed Waln's, arguing she is likely to owe more in restitution and has already suffered given media publication of her photo. King, who now lives in Ohio, told the court she hopes to repay investors.

Colleen Fitzharris, one of King's attorneys, said in an email Friday they would file an appeal in the case.

Following her prison term, King will serve three years of supervised release. A hearing in July will consider restitution. Prosecutors have asked the judge to order King to repay more than $2 million to investors and about $550,000 to the IRS.

Information from The Seattle Times archive was included in this report.

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