Over the last few years, a businessman from Hastings, Minnesota has been under federal investigation on suspicion of white collar crime. This week a federal indictment charged the businessman and his wife with creating a mortgage fraud conspiracy that allegedly cost lenders from around the country $5 million in properties purchased with fake financial documents.
The businessman’s attorney has represented the man regarding the alleged fraud over the last three years and said the businessman has maintained his innocence the entire time. Commenting further, the businessman’s attorney said, “He was involved in selling properties. It all had value, and people got the value they bargained for when they got it.”
The indictment, made public at the beginning of the week, alleges that the Hastings businessman and his wife individually or together, created or owned businesses they used to carry out mortgage fraud. Allegedly the businessman and his wife used their business to enter into purchase agreements for apartment complexes in Minnesota and Wisconsin that would eventually be converted to condominiums.
The businessman and his wife allegedly paid for the apartment buildings by inducing mortgage companies to lend money to unqualified borrowers whom the businessman and his wife had recruited in advance. The straw buyers or borrowers also promised to purchase the condos at prices above market value.
Authorities say the businessman and his wife used the scheme to build up a large reserve of money to pay for the buildings from June 2006 to 2008.
The indictment also alleges that the couple tricked financial institutions out of money through the use of a series of mortgages on their own property, a property in Hastings and a vacation property in Spicer.
Source: Star Tribune, “Hastings couple indicted in $5 million mortgage fraud,” Dan Browning, Oct. 19, 2011