Broker Sentenced for Mortgage Fraud Scam

Allison Tussey —  November 14, 2012 — 1 Comment

Chad Wegscheider, 38, White Bear Lake, Minnesota, was sentenced by United States District Judge David S. Doty for fraudulently brokering loans in a mortgage fraud scheme.

Teh defendant was sentenced to 36 months in federal prison on one count of conspiracy to commit mortgage fraud through the use of the wires. Judge Doty will determine the amount of restitution that Wegscheider owes to victims at a future hearing, not yet scheduled. Wegscheider, who was charged via an Information on August 1, 2011, pleaded guilty on September 1, 2011.

According to the Information, Wegscheider, who was the owner and president of a Maplewood mortgage brokerage business called Minnesota One, conspired with others to devise a scheme to defraud mortgage lenders. From June 2006 through March 2008, Wegscheider’s co-conspirator recruited straw buyers to purchase newly-converted condominiums in Minnesota and Wisconsin at inflated prices with borrowed funds. In many cases, straw buyers bought numerous units in short periods of time.

To trick mortgage lenders into providing loans to investors, Wegscheider prepared loan applications that overstated the bank account balances of the straw buyers and falsely stated that the straw buyers would use their own money to make down payments on the properties, when, in fact, he knew his co-conspirator was providing the down payments. Wegscheider also opened accounts in the names of the straw buyers and deposited his co-conspirator’s money into them in an effort to make it appear to potential lenders that the straw buyers had sufficient cash on hand to make the property purchases. All the loans fraudulently brokered by Wegscheider went into default, causing more than $2.5 million in losses to the lenders.

This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It was prosecuted by Assistant United States Attorney David J. MacLaughlin.

Allison Tussey

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One response to Broker Sentenced for Mortgage Fraud Scam

  1. I have been rather fascinated with trying to understand the mindset of personalities such as Bernie Madoff and other Ponzi scheme operators and those who have a fiduciary duty to their clients and constituents.

    I had personal contact with such people and they were quite charming when you met them, but would stab you in the back in a heartbeat. And thus far, their personalities seem to be congruent with the typical Sociopath.

    This seems to be a rampant “disease” that is plaguing our society. Those who have fiduciary duties to their clients seem to have no conscience whatsoever and instead work to see how many ways they can “screw” anyone and everyone that might be in a vulnerable position to them, or whom might be foolish enough to trust in them.

    Its one thing to encounter these people outside of your own work setting, but what about when you actually work with or for these sociopaths?

    Most people have heard of the mortgage franchise R.T.M. Funding. This company is a PRIME EXAMPLE of fraud and Misapplication of Fiduciary Property.

    And when their corporate umbrella could not protect them any longer they simply changed their company name and continued on their merry way until the whole house of cards finally collapsed.

    After considerable digging, its revealed that the primary principals were Randy Milam and his wife Tara Hartman Milam of Kingwood, Tx.

    This couple was a non discrimination team. They defauded anyone and everyone. SINGLE MOTHERS, BUSINESS PARTNERS, Franchise Owners, all the way down to their 19 year old secretary, who had to file charges against them to the Labor Law Department o collecther pitiful $350 a week salary.

    And these theives and frauds are still working in the financial sector even after having been chased through the courts for almost 7 years by those they defrauded and having judgment after judgment won against them.

    Hard to imagine ANYONE hiring this couple for any position in finance, because If they would defraud single mothers, business partner and their own franchise owners… they make even ole’ Bernie Madoff look like a saint.

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