2 Loan Officers Indicted for Straw Buyer Scheme
Troy Allen Huston, 42, and Chad Arthur Anderson, 38, both of Chisago City, Minnesota, two mortgage loan officers, have been charged 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 defendants were indicted and charged 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 brokerage 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.
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.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
source: Mortgage Fraud Blog