Mortgage Loan Officers Sentenced For Scam Involving Albertville, Otsego Properties
Two Chisago City men were sentenced to five years in federal prison for mortgage fraud and ordered to pay more than $4.8 million in restitution.
Two mortgage loan officers who carried out a scheme involving loans on homes in Albertville, Otsego, Elk River and other cities were sentenced to five years in federal prison Monday.
Chad Arthur Anderson, 39, and Troy Allen Huston, 43, both of Chisago City, were sentenced on one count of conspiracy to commit mortgage fraud through the use of interstate wires. Anderson was sentenced to five years, and Huston, just under five years — 57 months.
They were also ordered to pay more than $4.8 million in restitution.
The loan officers admitted in their guilty plea that they recruited straw buyers, mainly relatives and friends, to purchase properties at inflated prices and then distributed the excess loan money among themselves, the straw buyers, and others involved in the scam.
All loans went into default, causing more than $2.5 million in losses to mortgage lenders.
The scheme took place between 2006 and 2007 on homes around the Twin Cities, according to information from the U.S. Attorney's Office. Properties included were 32 homes located in Otsego, Oak Grove, Elk River, St. Francis, Brooklyn Park, Isanti, St. Paul, Chisago City, Becker, Cambridge, Buffalo, Minneapolis, Zimmerman, and Albertville.
Anderson and Huston were indicted in April 2012, and pleaded guilty in August 2012. At the time, they worked as loan officers at Prestige Mortgage, a mortgage brokerage company in White Bear Lake.
The men admitted in their plea agreement that while at the company, they submitted false loan applications to prospective lenders and brokered numerous fraudulent mortgage loans.
Anderson admitted to recruiting five straw buyers to purchase 17 homes, while Huston recruited others to buy additional homes.
At the time of the scheme, Anderson and Huston were also involved in Lofton Property Management in Chisago City. They used the company's name on construction invoices for loan proceeds for services Lofton Property never provided. They also used the company's name on property settlement statements to receive fradulent mortgage loans, which they then disbursed amongst themselves and others involved.
At the same time, Huston was involved in YES Financial, a Chisago City property finance company, through which he received more loans using false loan applications on behalf of the straw buyers. On the applications, he overstated their income, misrepresented their employment, and failed to disclose their other mortgage obligations or their source of down payments.
The case is a result of an investigation by the FBI, and was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.