A Minnesota couple and another man are charged with defrauding mortgage lenders in a $5 million, two-state scheme that involved people who couldn’t afford loans.
The Star Tribune explains the complicated scheme:
The indictment, handed up late Monday, alleges that the Hoffmans, either separately or together, owned and controlled business entities that they used to carry out the alleged fraud, including Home Funding Corp., Accredited Financial Services, Encore Acquisitions, Bessford Partnership and GRD Property Management.
Minnesota One Mortgage Inc. of Maplewood brokered the loans on the deals. Its former owner, Chad Wegscheider, 37, formerly of White Bear Lake, was charged in August with conspiracy to commit mortgage fraud involving the conversion of apartment buildings into condominiums.
Wegscheider, the Hoffmans and others allegedly conspired in a scheme to enter into purchase agreements for apartment buildings in Minnesota and Wisconsin that would be converted into condos. They allegedly paid for buildings by tricking mortgage companies into lending money to unqualified borrowers whom they’d recruited in advance and who agreed to buy condos at inflated prices.
Authorities say the scheme, from June 2006 to 2008, created a pool of funds to pay for the buildings.
The indictment against the Hoffmans alleges that they also bilked lenders on a series of mortgages involving their primary residence, a million-dollar home on Neal Avenue in Hastings, and a vacation property on Spicer Lake.
Thu, Oct 20, 2011
Blog, Scams