Mortgage Fraud in Minnesota
Department of Justice Indicts
Three People on Fraud Charges
From the Minnesota Association of Realtor’s
Three people were indicted by the U.S. Department of Justice on mortgage related fraud charges. A Mortgage Broker and his assistant who worked with American Alliance Mortgage Company were indicted by a federal grand jury for allegedly bilking vulnerable homeowners. The charges include one count of conspiracy, three counts of mail fraud, and one count of engaging in a financial transaction with criminally derived property.
The indictment alleges that the duo schemed to defraud homeowners who were either in foreclosure or behind on their mortgage payments. They allegedly caused homeowners to refinance their homes and then stole some or all of the equity checks produced through the refinancing. In some cases they allegedly used physical intimidation to force homeowners to endorse equity checks over to them.
If convicted they face maximum penalties of 5 years for conspiracy, 20 years for postal fraud and 10 years for engaging in a financial transaction with criminally derived property.
In the second case, the former president of Profile Title and Escrow of Bloomington has been indicted for defrauding clients and lenders of approximately $2.5 million. In this case, the accused set-up escrow accounts as a depository for various lenders for use in closing real estate transactions. The indictment alleges that she then transferred money from the escrow account to her “integrity” account from which she paid approximately $2.5 million in personal expenses.
In a third case, a mortgage broker from Prior Lake pled guilty to federal mail fraud and money laundering stemming from a mortgage fraud scheme he devised and carried out to conceal $2.5 million in payments. His crimes involved 40 real estate transactions in which lenders were provided fraudulent loan applications and settlement statements. In the scheme, overstated purchase prices allowed the individual to pocket the difference. He faces 20 years in prison for mail fraud and 10 years for money laundering.
These cases are a result of investigations conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division. The Assistant U.S. Attorney will be prosecuting these cases. All three enforcement agencies had representatives present at the Minnesota Association of REALTORS special spring program discussing the problem.
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Great post, I guess they don’t have the famous “Minnesota Nice” in them! Haha!
You are right! These types of endeavors don’t apply to the famous “Minnesota Nice,” but happened. The good thing is they were caught and hopefully it is a good lesson for others who try to outsmart home owners.