Federal Charges Filed in Second Mortgage Scheme with Albertville Ties
Less than six months after an Albertville man was sentenced to more than 10 years in prison for fraud, another mortgage fraud case with local ties has hit federal courts.
A federal indictment unsealed Friday charges two mortgage loan officers with recruiting straw buyers to purchase properties at inflated prices and then distributing the excess loan funds among the buyers and between themselves in the form of “kickbacks.” The indictment, which was filed on April 3, 2012, charges Troy Allen Huston, 42, and Chad Arthur Anderson, 38, both of Chisago City, with one count of conspiracy to commit mortgage fraud and eight counts of mortgage fraud through interstate wire. The indictment was unsealed following the defendants’ initial appearance in federal court.
The estimated loss to mortgage lenders because of the defendants’ alleged wrongdoing exceeded $1.8 million. Fraudulent real estate transactions purportedly involved properties in Otsego, Oak Grove, Elk River, St. Francis, Brooklyn Park, Isanti, St. Paul, Chisago City, Becker, Cambridge, Buffalo, Minneapolis, Zimmerman, and Albertville.
The indictment alleges that from 2006 through 2007, the defendants, who worked as loan officers at Prestige Mortgage, a mortgage broker business in White Bear Lake, recruited mainly friends and acquaintances to act as straw buyers in the purchase of several homes in the Twin Cities.
The defendants allegedly brokered the fraudulent mortgage loans by knowingly preparing and submitting false loan applications to lenders.
In addition, while acting as signatories for Lofton Property Management, a property management business located in Chisago City, the defendants allegedly received illicit funds from the transaction closings that involved the fraudulently acquired real estate.
During that time, Huston was also a signatory for YES Financial, a property finance business located in Chisago City, and in that capacity, he allegedly received loan funds, which he signed over in part to himself and others.
If convicted, the defendants face a potential maximum penalty of 20 years on each count of mortgage fraud through interstate wire count and five years for conspiracy to commit mortgage fraud. All sentences will be determined by a federal district court judge.
The indictment comes about six months after an Albertville man convicted as the ringleader of a mortgage fraud scheme that caused losses in lenders to pile up to the tune of $7.6 million was sentenced to more than 10 years in jail.
Back on Oct. 31, 2011, United States District Court Judge David S. Doty sentenced John Anthony Spencer to 125 months in prison on one count of conspiracy to commit mortgage fraud through interstate wire, 10 counts of wire fraud, one count of bank fraud, and one count of money laundering.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. MacLaughlin.