Portola Valley man sentenced, penalized $2 million

Chhabria also ordered Migdal to pay $2 million in fines and restitution, including a $1 million fine, $460,214 in restitution to three banks and forfeiture of $539,785 worth of property.

Migdal pleaded guilty in July to one count of conspiring to commit bank fraud through short sales of two condominiums in Hawaii in 2009 and two counts of making false statements to a bank concerning properties he owned in Portola Valley and Mountain View.

The prison term and the $2 million penalty were agreed to in Migdal’s plea bargain with federal prosecutors. In exchange, prosecutors agreed to dismiss two additional counts of bank fraud and one count of aggravated identity theft in a 2017 indictment.

The conspiracy conviction concerned two condominiums Migdal bought in Kihei, Hawaii, in 2006 for $521,500 and $511,708, with the help of mortgage loans from two banks.

In 2009, he sold them for slightly more than half that amount — $228,000 and $207,00 respectively — in so-called “short sales” to a fictitious buyer created with the stolen identity of a deceased person.

Migdal admitted in his guilty plea that he controlled and rented the properties in the name of the stolen identity and later transferred them back to himself, according to U.S. Attorney’s Office spokesman Abraham Simmons.

At the time, Migdal was caught up in the real estate crash of 2008, according to a defense sentencing brief.

In the other two counts, Migdal pleaded guilty to making false statements to JP Morgan Chase Bank, formerly Washington Mutual, on mortgage modification applications for a condominium he owned in Mountain View and his home in Portola Valley.

In 2009, he falsely told the bank the Mountain View unit was his principal residence and in 2010 he falsely said he had a job and had rented out part of the Portola Valley house.

The restitution includes $239,519 to Fannie Mae, successor to a deed of trust held by EverBank, and $202,491 to Bank of America in connection with the Hawaii properties, plus $18,205 to JP Morgan Chase.

Migdal was born in a Soviet labor camp in Siberia, was raised in Leningrad and left Russia at the age of 30, according to the defense sentencing brief. After living in Israel, Canada and Germany, he came to the Bay Area in 1991 and worked as a petroleum engineer and then a real estate developer until the real estate crash.

Prosecutors alleged in a sentencing brief this month that Migdal continues to control the Hawaii, Mountain View and Portola Valley properties as well as three Palo Alto townhouses, a cabin at Martins Beach and a property in Tel Aviv.

Charges remain pending against Migdal’s co-defendant in the bank fraud conspiracy, Naum Morgovsky of Hillsborough.

Morgovsky and his wife, Irina Morgovsky, are also accused in the same indictment of conspiring to violate a U.S. arms export control law by exporting components of night vision rifle scopes to Russia without a license.

They are scheduled to go on trial in Chhabria’s court on June 13.