Benjamin Osmanson, 30, California and Sarita, Texas, pleaded guilty to three counts of conspiracy, wire fraud, and money laundering related to his scheme to defraud mortgage lenders by submitting false loan applications in the names of “investors.” Osmanson was arrested in October 2008 in Texas. His codefendant Jillian Protzman pled guilty on August 17, 2009, to two counts of conspiracy and money laundering. Two mortgage brokers involved in the scheme, Mike Otis and Chris Whitfield pled guilty earlier this year in the Western District of Kentucky at Louisville, Kentucky. Additionally, Florida realtor Margaret Giresi pled guilty in Vermont to an information charging her with conspiracy for her role in the scheme.
Osmanson was charged in an eleven-count indictment alleging that from at least as early as January 2006 through at least April 2007, he and Protzman orchestrated the purchase of at least 50 properties in California, Florida, Kentucky, and Vermont in the names of at least 10 investors, obtaining more than $26,000,000.00 in loans to support the purchases. According to the indictment, Osmanson recruited friends, family members, and acquaintances to “invest” in real estate. Osmanson and Protzman then submitted fraudulent loan applications in the names of the investors to obtain fully-financed mortgage loans. The indictment states that Osmanson, Protzmanz and others sought loans from multiple lenders, and closed the loans for each investor within a short period of time, in order to preserve the appearance of the investor’s good credit until the transactions were complete. The indictment further alleges that Osmanson and Protzman enriched themselves with “rebates,” “fees,” and commissions connected to the fraudulent property purchases, and continued to recruit investors and submit applications for new loans even after the loans to the initial investors began to fail. During the plea hearing, Osmanson admitted his scheme caused over $11 million in losses to the mortgage lenders as the properties purchased during the scheme went into foreclosure.
Sentencing is preliminarily scheduled for January 2010. Osmanson faces maximum possible terms of imprisonment of up to five years on the conspiracy count, 30 years on the wire fraud count, and 10 years on the money laundering count; however, the actual sentence in the event of a conviction will be determined by the Court after consulting the federal sentencing guidelines. The Court will also order Osmanson to pay restitution in an amount determined after consultation with the U.S. Probation Office.
The Office of the United States Attorney for the District of Vermont announced the guilty plea. United States Attorney commended the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigations Division, for their hard work on this matter. The United States is represented by Assistant U.S. Attorney Eugenia A. P. Cowles. Osmanson is represented by Assistant Federal Public Defender Alison S. Arms.