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The law has finally caught up with former Auburn real-estate broker Galina Kravchenko, more than five years after a grand jury indicted her and her husband on charges of conspiracy, bank fraud and money laundering.

Kravchenko appeared in U.S. District Court in Seattle in December after being arrested and transported by U.S. Marshals from Chisinau, Moldova, the capital city of one of Eastern Europe’s poorest countries. She says she’s been living in Moldova since she fled in 2008 with her husband, Aleksandr, and their three children.

Her husband is still an international fugitive.

Federal officials say the local couple played a major role in the May 2009 failure of Westsound Bank, which once was the Pacific Northwest’s fastest-growing bank. At the end of 2013, the Federal Deposit Insurance Corp. (FDIC) estimated the Bremerton bank’s failure cost its insurance fund $82.6 million.

The Kravchenkos allegedly conspired with others to obtain at least $49 million in fraudulent construction loans from Westsound Bank and diverted at least $1 million of the proceeds for their own benefit, according to a 2009 grand-jury indictment.

Suddenly, the arrest of Galina Kravchenko could help resolve a criminal case that highlights the worst excesses of the housing-bubble years. In 2012, the FDIC settled a negligence lawsuit that sought $15 million against the bank’s former officers and directors for $1.73 million, saying it was the most cost-effective resolution.

Kravchenko, 35, didn’t fight extradition, officials say. If she had resisted, the United States would have had a difficult time getting Moldova to turn her over because the two nations don’t have an extradition treaty. In a memo to the court, Kravchenko offers new details about her origins, stints in government jobs and a failed U.S. attempt in 2012 to bring them back here.

From Russia to real estate

Born in Russia, Kravchenko arrived in the United States with her family in 1992 when she was 13. The eldest of eight, she graduated from Curtis High School in Tacoma and earned a certificate as a pharmacy technician from Clover Park Technical College.

In 1998, when she was around 19, she married Aleksandr. She became a naturalized U.S. citizen around the millennium. She kept her Russian citizenship, too.

Her first job was at McDonald’s, then at an apartment-management firm.

From there, she worked in government.

It’s unclear what she did for 18 months at the Washington State Employment Security Department. She went on to answer phone calls from the public for the Social Security Administration.

In 2005, she got a real-estate sales license from the state and joined a real-estate brokerage called Skyline Properties.

Not long after that, federal prosecutors allege she and her husband conspired to loot Westsound Bank.

Feds allege conspiracy

The Kravchenkos recruited individuals, many of them self-employed construction workers, to obtain construction loans to buy properties they selected and even controlled, according to the indictment, which was unsealed in 2012.

They colluded with a loan officer at Westsound Bank’s Federal Way branch to file fraudulent loan applications, federal officials say. The loan officer was responsible for at least 120 construction loans totaling more than $118 million to unqualified borrowers, and these loans represented 83 percent of the bank’s troubled loans in October 2007, the FDIC alleged in a complaint years later.

The bank’s leaders failed to supervise the loan officer and were familiar with Alex Kravchenko, the FDIC alleged its civil lawsuit, having approved millions in loans to him and his homebuilding company.

For example, in 2006 a buyer represented by Galina Kravchenko put in an offer on a home along 140th Avenue Northeast in Bellevue. The buyer applied for a $1.7  million loan to acquire the property and build a mansion, falsely claiming a monthly income of $30,000, according to the indictment.

Westsound funded the loan. In May 2006, the property sold for $750,000. The escrow agent wired a $10,000 “development fee” to Galina Kravchenko at a bank account she shared with her husband.

Skyline Properties issued her a check for about $21,840, her commission on the property sale, which she deposited into the couple’s joint account, according to the indictment.

The brokerage says it later fired her.

The property was surrendered in lieu of foreclosure in 2008.

Unsuccessful attempts to extradite

At a Dec. 19 District Court hearing in Seattle, federal prosecutors asked U.S. Magistrate Judge James Donohue to detain Galina Kravchenko pending her trial on the felony charges.

“It is nearly impossible to overstate the risk that this defendant presents for fleeing prosecution,” said Assistant U.S. Attorney Thomas Woods.

In 2008, the Kravchenkos were told they were under investigation and were looking at the possibility of jail time, he said.

After that, the couple bought round-trip tickets to Kiev. They also cashed out about $1 million through refinance loans — cash the federal government still hasn’t been able to track down.

“They took that flight with their three children and they never came back,” Woods told Donohue.

Four years later, the U.S. government thought they had a deal with the couple to return to resolve the charges.

Flight tickets were purchased. The aircraft landed in the United States. The Kravchenkos never boarded it.

Finally, last September, Galina Kravchenko was arrested again in Moldova traveling with forged identification papers, Woods said. This time, she was extradited.

The State Department has met with Alex Kravchenko in Moldova several times to persuade him to return voluntarily, but Moldova will not extradite the native Moldovan.

Kravchenko’s attorney, Peter Offenbecher, told Donohue that it was the husband who forced the family to flee the country in 2008, not Galina Kravchenko.

“I have come back here to get this over with,” Offenbecher said the wife told him. “I am tired of living in another country.”

Galina Kravchenko asked the court to let her live with her sister, Anastasia Kolosov, in Auburn until her trial. She offered to wear a GPS tracking device and surrender her passports.

Her parents and siblings even offered to post a property bond secured by their homes to reassure the court she wouldn’t flee again.

And if that’s not enough, her three kids — ages 7, 11 and 15 — recently arrived from Moldova and are staying with relatives, Offenbecher said.

“She’s a U.S. citizen,” he said. “This is where she wants to live.”

After thanking Galina Kravchenko’s parents and siblings for attending the hearing, Donohue ordered her detained.

She has extensive contacts in Moldova, “where her husband is hiding,” may have access to cash to finance an escape and is “familiar with forged international travel documents,” the judge ruled.

She’s now at a federal detention center in SeaTac. Her trial on the felony charges, which now include filing false tax returns, is set to begin Feb. 17.

Ron Hennig, co-owner of Skyline Properties, said he was glad to hear Kravchenko had been apprehended.

“It makes you feel sometimes like the good guys win,” he said.

Sanjay Bhatt: 206-464-3103 or On Twitter @sbhatt