Man Sentenced to 7+ Years in Prison for Real Estate Fraud Scheme

Allison Tussey —  July 20, 2010 — 3 Comments

Timothy Lynn Beliveau, Minneapolis, Minnesota, was sentenced by U.S. District Court Judge James M. Rosenbaum to 87 months in frederal prison. Judge Rosenbaum referred to Beliveau as a “con man.” Beliveau pleaded guilty in March 2010 to one count of engaging in a monetary transaction involving criminally derived property in connection to a real estate fraud scheme through which he induced investors to purchase distressed real estate from vulnerable homeowners at inflated prices. In addition, he pled guilty to failing to pay more than $900,000 in federal employment taxes. The scheme resulted in estimated losses to investors and financial lenders of approximately $2.4 million. Judge Rosenbaum said Beliveau “knew this was a fraud from the get-go.” He called Beliveau “a thief” and added, “You took money, and you blew it. This wasn’t a lack of incompetence. It was stealing.”

Relative to this crime, Beliveau was indicted on October 21, 2009, on three counts related to fraud as well as the failure to account for and pay taxes. He was charged via an information to the monetary transaction count on March 9, 2010. The indictment stated that between 2004 and July of 2007, Beliveau orchestrated the fraud scheme. At that time, he was the owner of U.S. Housing & Financial Services, a company that assisted homeowners who were close to losing their homes to foreclosure. He also owned American Alliance Mortgage Group, a mortgage brokerage company with offices in Minnetonka, Plymouth, Roseville, Wayzata, and Edina as well as in Hudson, Wisconsin.

Beliveau used U.S. Housing & Financial Services to encourage homeowners in or near foreclosure to sell their homes to the investors he recruited. The investors then immediately sold the homes back to the distressed homeowners pursuant to contracts for deed. Instead of allowing the homeowners to receive the proceeds from the sales of their homes, however, Beliveau caused the homeowners to assign those proceeds to him or his companies for the purported purpose of helping the homeowners make their monthly contract-for-deed payments to the investors. Bydoing so, the homeowners could supposedly buy back their homes after a period of time; and, in the meantime, they were allowed to continue to live in them.

Beliveau falsely told investors that the homeowners were carefully screened to ensure their financial problems were merely situational, and that they were unlikely to default on their monthly contract-for-deed payments. Beliveau also represented that the homeowners would receive financial counseling if they defaulted. Moreover, Beliveau assured investors that homeowners who fell into default would be evicted, and the monthly contract-for-deed payments would then be covered by the funds held in the escrow account or otherwise paid by U.S. Housing & Financial Services. 

Ultimately, most of the distressed homeowners were unable to make their monthly contractfor-deed payments or otherwise buy back their homes. In addition, many of the loans taken out
by investors to purchase the homes went into default because the money supposedly in the escrow account to pay the mortgages had been used by Beliveau for his personal benefit.

As to the specific charges filed against Beliveau, he admitted writing a check from the account of one of his companies, West Bay Capital, Inc., in the amount of $183,082.58, to complete the purchase of a Wellcraft Excalibur boat from a private party in Iowa on April 1, 2005. Furthermore, Beliveau admitted failing to pay to the IRS $901,985.94 in employee withholding taxes, which he had collected through another company he owned.

On June 25, 2010, Beliveau‘s ex-wife Shelley Lee Milless was sentenced to 24 months in prison for preventing the IRS from collecting more than $900,000 in employment taxes from Beliveau‘s mortgage brokerage company. Milless was charged on October 30, 2009, and pleaded guilty to the charges on November 10, 2009. In her plea agreement, Milless admitted conspiring with her then-husband, Beliveau, to impede the IRS from collecting $901,985.94 in income taxes, Federal Insurance Contributions Act taxes, and Medicare taxes collected from employees of American Alliance Mortgage Group between October 1, 2002, and September 30, 2005. Instead, Milless used those funds for her personal benefit.

To prevent the IRS from collecting the taxes, Milless incorporated a shell company, American Alliance Mortgage Realty & Title, to which the assets of Alliance Mortgage Group were transferred. Milless knew the transfer had no business purpose other than to deplete American Alliance Mortgage Group of its assets, thereby impairing the ability of the IRS to
collect the taxes owed.

Following the sentencing, Julio La Rosa, Special Agent in Charge of the IRS-Criminal Investigation Division’s St. Paul Field Office, said, “As mortgage fraud schemes continue to surface, our financial investigators realize the dishonest buck may not stop there. As part of this case, a shell company was set up in order to evade paying over withheld employment taxes from mortgage company employees. IRS-Criminal Investigation looks very seriously at mortgagerelated schemes that not only prey on homeowners and real estate investors, but create potential hardships for industry employees through employment tax fraud schemes.”

This case was the result of an investigation by the U.S. Postal Inspection Service and the IRS-Criminal Investigation Division. It was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.

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Allison Tussey

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3 responses to Man Sentenced to 7+ Years in Prison for Real Estate Fraud Scheme

  1. What I find interesting is that the states that had the most amount of mortgage fraud..FL, CA, AZ seem to have the fewest arrests?

    • SAM AT NO WAY June 5, 2015 at 2:23 pm

      “This wasn’t a lack of incompetence. It was stealing.” What is wrong with that statement? Or is it just me? This is a man making judgement “the Judge” on very complex case and he does not have a the ability to formulate the thought properly. The proper statement would have been ” This is not a lack of competence”. The only real incompetence I found after reading the case files was with the Judge. The man trying to survive in a business that is headed in the tank will make many mistakes along the way, many to do with ego and trying to get to the next day. Trying to preserve assets to pay the people that need to get paid. The IRS does not stand in line. It all belongs to them and that is a hard learned lesson. “Your money” no matter who you are is not yours, it is on loan to you from them (IRS) to be used as they see fit. That is why the magic $10,000 rule exist. You start moving large sum’s of your money around and they want to make sure that they get their slice. I am not a tax protester, I believe that there is a public responsibility that we all must share in. We have gone way beyond that. The dollars you earn are not yours to be spent as you wish, they are to be spent as the IRS deems proper. Try it another way and see where you wind up.

      • Trust me, the judge was very competent is his decision to put Tim in prison. Tim Beliveau is a bad man! He did not just make mistakes when his business was failing. I used to work for him, and I can guarantee that I know this guy from real life experiences with him better than you do from reading case files. I saw this guy do some despicable things. The funny thing is, in any of these case files or articles about this whole situation, they never mention the original name of Tim’s company, which he co-owned with a man named Joe. In this specific article, they don’t even get information correct… “Milless admitted conspiring with her then-husband, Beliveau, to impede the IRS from collecting $901,985.94 in…Medicare taxes collected from employees of American Alliance Mortgage Group between October 1, 2002, and September 30, 2005.” What this article doesn’t mention is that the name of Tim’s company in October 2002 was not American Alliance. It was Bayside Lending Group. I know because I was their office manager and telemarketing supervisor from January 2002 to December (right before Christmas) 2002. I helped Tim and Joe in their start-up mortgage company. However, I quit when I started to notice Tim doing some pretty shady things. I spoke up about not feeling like things he was doing was right. He didn’t care at all. Even though the company was succeeding and growing quickly, it wasn’t enough for him. He wanted and needed more and more and more all the time. He started hiring people he knew from a company he had previously worked at. Those people were just as shady and unscrupulous and he was. I ended up quitting because I didn’t feel like the company was headed in a good, moral direction. I didn’t want to be part of it. It didn’t take them long to change the name of the company and run it into the ground. I’m assuming Tim lost a lot of money when his business started failing. Instead of having one successful location for his business, he had many locations that were in danger. Having to pay all those employees, I doubt he had much money for himself and his fanciful ways of life. So he decided to start ripping people off, commonly older people! He needed money to fund his extravagant ways and lifestyle. Tim belongs in prison! I’m just sad he didn’t get a longer sentence. He was really nice, but just like that judge said, he’s a con-man. He has to be nice and polite, otherwise he would starve. This has nothing to do with the IRS and their rules that people don’t like or agree with. Tim owed the IRS almost a million dollars among other poor choices he and his wife made. They wanted it all. They thought they were better than everyone else. The IRS doesn’t care if you own one business or ten. When you owe taxes, it is your responsibility to pay them. That is part of how our country is run. Tim didn’t care. Tim didn’t like to follow the rules. That’s one reason why him and Joe left the company they worked at for years and started their own. They were sick of answering to people above them. They wanted to call the shots. And call the shots Tim did! He called them so poorly that he landed himself in prison. Again…where he belongs!! Like I said before, Tim is a bad man!! Don’t think for a second that this judge was the incompetent one in this case. He made the exact right choice to put that jerk in prison!! Hell, Joe won’t even speak to him after what he did to their company. Joe had nothing to do with it. I wouldn’t have anything to do with it. Tim knew exactly what he was doing, who he was hurting, and why. There’s no excuse for that at all.

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