David Saks: May 2012

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MORTGAGE FRAUD RINGLEADER JAILED SIX YEARS FOR SCAM INVOLVING 70 HOMES

Mortgage Fraud Ringleader Jailed for Scam Involving 70 Homes

Michael Anthony Prieskorn, 37, Ellendale, Minnesota, was sentenced on charges stemming from a mortgage fraud scheme that resulted in losses of at least $18 million for mortgage lenders.

 

On May 10, 2012, United States District Court Judge Paul A. Magnuson sentenced the defendant for orchestrating the scheme, which involved the purchase of approximately 70 residential properties in Florida and Minnesota between December 2006 and April 2007. Prieskorn was sentenced to 72 months in prison on one count of conspiracy to commit wire fraud and one count of engaging in an illegal monetary transaction. Prieskorn was indicted on January 20, 2010, and pleaded guilty on March 23, 2010.

As previously reported by Mortgage Fraud Blog, Prieskorn admitted he and others conspired to obtain mortgage loan proceeds by luring buyers to purchase properties. In return, Prieskorn promised the buyers $5,000 for every property purchased. He also promised to make all mortgage payments and pay all other bills associated with the properties for a specific term, after which, he would sell the properties at no cost to the original buyers or "investors." Prieskorn maintained that the mortgage loans were risk free to their investors, knowing all the while the 20 investors were responsible for the loans. Following the closing of these real estate transactions, many investors defaulted on their mortgage loans and were forced into short sales or foreclosure. Yet, Prieskornadmitted receiving at least $1 million in gross receipts as a result of the scam.

In pleading guilty, Prieskorn also admitted concealing from mortgage lenders that he temporarily deposited funds into the bank accounts of some investors to misrepresent the true financial status of those buyers, thereby inducing lender approval of the mortgage loans. He also concealed from the 20 mortgage lenders that he paid the down payments and closing costs for the investors.

In furtherance of the scheme, Prieskorn transferred money, by wire, into investors' bank accounts and caused the faxing of fraudulent mortgage loan applications to potential mortgage lenders. He also caused lenders to make wire transfers of mortgage loan proceeds on related real estate transactions. Specific to the monetary transaction count, Prieskorn structured financial transactions to conceal that he was the recipient of funds from the fraud. Those transactions included a $225,000 transfer on May 7, 2007.

On February 8, 2011, Judge Magnuson sentenced Prieskorn's co-defendant Richard Matthew Laho, 55, Buffalo, Minnesota, to five years of probation on one count of mail fraud. He was also indicted on January 20, 2010, and pleaded guilty on July 8, 2010.

In his plea agreement, Laho admitted that in March and April of 2007, he took part in the scheme by participating in a real estate purchase in Naples, Florida. In that transaction, the buyer was given $5,000 for purchasing the property and falsely told that all mortgage payments and other bills associated with the property would be paid for him. He also was told that the property eventually would be sold as an investment. Laho admitted misleading the lender into believing, however, that the buyer was intending to be the true owner and resident of the home. The property eventually went into foreclosure, resulting in a loss to the mortgage lender of between $490,000 and $690,000.

"Mortgage fraud creates so much harm to individuals, businesses, and our economy, but today's sentencing is a strong reminder how serious our courts consider this criminal activity," said Kelly R. Jackson, Special Agent in Charge, IRS-Criminal Investigation, (IRS-CID), St. Paul Field Office Field office. "IRS-CID is committed to 'following the money trail' to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice."

This case was the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the Eagan Police Department, the Minnesota Department of Commerce, the U.S. Secret Service, the Minnesota Financial Crimes Task Force, and the Minnesota Bureau of Criminal Apprehension. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

source: Mortgage Fraud Blog




David Saks



Time&Temp Memphis

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