Dennis G. Sartain, Hilliard, Ohio, and Bonnie Helt, Columbus, Ohio, pleaded guilty to conspiring to commit mortgage fraud, money laundering and obstruction of justice. Sartain, the accountant for co-defendant Thomas Parenteau, pleaded guilty to one count of conspiring to defraud the United States by impeding and impairing the IRS, one count of conspiring to commit money laundering and one count of conspiring to obstruct justice. Helt, a real estate agent for co-defendant Parenteau, pleaded guilty to one count of conspiring to commit bank and wire fraud and one count of conspiring to obstruct justice. Parenteau is scheduled to begin trial on March 8, 2010.
As previously reported on Mortgage Fraud Blog, in April 2009, Sartain, Helt and Parenteau were charged with tax fraud, bank and wire fraud, money laundering, and obstruction of justice in a superseding indictment. According to the indictment and statements made at the plea hearing, Sartain conspired with Parenteau and others to file false individual income tax returns for Pamela McCarty with the IRS for the tax years 2000 through 2003. These four tax returns falsely reported substantial losses and generated tax refunds from the IRS and state of Ohio of over $800,000 in total. McCarty, who was Parenteau’s mistress, gave a substantial portion of the fraudulent tax refunds to Parenteau or his nominees.
According to the indictment and statements made at the plea hearing, Sartain conspired with Parenteau, McCarty and others to prepare a $4.5 million fictitious loan application to refinance to improve a 30,000 square foot home. As a result of the fraudulent loan documents, McCarty obtained nearly $4.5 million from one bank and an additional $1.5 million from a second bank, and she transferred the money to Parenteau. From March 2004 through September 2006, Parenteau and Sartain dispersed in excess of $1 million of the loan proceeds back to McCarty by disguising the payments as payroll checks from Your Home Source (YHS) and JSS Investments, rental payments and consulting payments from YHS and other miscellaneous payments. On January 31, 2007, Parenteau and his wife refinanced the 30,000 square foot property and received a $12 million loan, which was used in part to pay off McCarty’s existing obligations at the two banks.
According to the indictment and statements made at the plea hearing, Helt admitted that from 2005 through 2007, she, Parenteau, and others negotiated and participated in real estate deals in which they sold luxury homes for a falsely inflated purchase price from the builder in exchange for an undisclosed or disguised kickback. In many of the transactions, the buyers misrepresented their income and assets in order to obtain financing of the inflated purchase price. The buyers and sellers in the transactions attempted to justify the inflated purchase prices by creating false work change orders and addendums which created the appearance that the inflated price represented additional substantial work to be completed on the homes. No such agreement was actually intended by any party. Further, those documents were not disclosed to the lenders. The object of each transaction was to use the loan proceeds in excess of the actual purchase price in order to fund hundreds of thousands of dollars in kickback payments to the buyers. The loans associated with several of the real estate purchases have gone into default.
According to the indictment and statements made at the plea hearing, both Sartain and Helt admitted to conspiring with Parenteau and others to obstruct the IRS criminal investigations of Sartain, Parenteau and others. Sartain and Helt admitted to altering or destroying records as well as lying to federal and local law enforcement agents.
The U.S. District Court Judge Michael H. Watson has not scheduled sentencing date. Sartain faces a maximum sentence of 30 years in prison and a maximum fine of $1 million or twice the monetary loss or gain from the offense. Helt faces a maximum sentence of 35 years in prison and a maximum fine of $1.25 million or twice the monetary loss or gain from the offense.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended the special agents of the IRS Criminal Investigation for the investigation, as well as Tax Division trial attorneys Richard Rolwing, Sean O’Connell and Jessica Nuzzelillo who are prosecuting the case.