Charges Filed for Theft of Real Estate Development Project Funds
Virginia Marie Carlson, 60, and her husband, Philip Lee Carlson, 55, Wayzata, Minnesota, will make their first court appearance Nov. 22, 2011, on major theft by swindle charges in connection with the defunct Amber Woods commercial real estate project in Orono, Minnesota.
The couple are each with four counts of theft by swindle over $35,000 and one count of attempted theft by swindle over $35,000.
The office building development, with room for about 10 businesses, began construction in 2007 but came to a halt in mid-2008.
The Carlsons needed help to secure financing for the project, so in 2006 they entered into a partnership with a company called Hilloway East.
That company would own 51 percent of the project and together the partnership was able to arrange financing of more than $6 million from Commercial Bank of Bloomington.
The Carlsons, through their company, Interspace, acted as the general contractor on the project. They were to submit draw requests on the loan to the bank and its agent and use that money to pay the subcontractors. In return, Interspace was required to provide the subcontractors invoices and lien waivers to the bank.
According to the criminal complaint, beginning in October 2007, the Carlsons began submitting fraudulent invoices for payment.
In one case, Virginia Carlson submitted an invoice for $31,985 to pay Logan Ryan Corp.
A forged signature of Rory Synstelien is part of the invoice. Synstelien is Virginia Carlson’s son and he denied that he did any work on Amber Woods through a company called Logan Ryan and never sent an invoice or signed his name.
Two employees of the Carlsons told investigators that the couple told subcontractors to inflate their invoices so Interspace could take some of that money and they also had false invoices from subcontractors created.
The scheme began to unravel when officials of Hilloway East began hearing complaints from subcontractors that they had not been paid, even though the money had been given by the bank to Interspace.
The Hennepin County Attorney’s Office filed the charges against the couple.
Courtesy Mortgage Fraud Blog