Timothy Lynn Beliveau, 42, Mound, Minnesota, man pleaded guilty in federal court to charges related to a real estate fraud scheme that defrauded vulnerable homeowners and induced investors to purchase distressed real estate from those homeowners at inflated prices. Timothy Lynn Beliveau pled guilty to one count of engaging in a monetary transaction in criminally derived property and one count of willful failure to account for and pay taxes. Beliveau was indicted on October 21, 2009.
In his plea agreement, Beliveau 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. Beliveau acknowledged in his plea agreement that those funds were derived from a complex fraud scheme which caused losses to the investors and lenders in an amount exceeding $2.4 million. In addition, Beliveau admitted failing to pay to the IRS $901,985.94 which he had collected from the employees of another company he owned.
According to Beliveau’s indictment and as previously reported on Mortgage Fraud Blog, he orchestrated the fraud scheme between 2004 and July 2007. He was the owner of U.S. Housing & Financial Services, a company that assisted homeowners who were close to losing their homes to foreclosure. During that time, Beliveau also owned American Alliance Mortgage Group, a mortgage brokerage company with offices in Minnetonka, Plymouth, Roseville, Wayzata, Edina and Hudson, Wisconsin.
The indictment alleges that Beliveau’s scheme victimized distressed homeowners, investors and lending institutions. Specifically, Beliveau used U.S. Housing to encourage homeowners in or near foreclosure to sell their homes to 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 of the sales of their homes, Beliveau caused the homeowners to assign those proceeds to Beliveau or his companies for the purported purpose of helping the homeowners make their monthly contract-for-deed payments to the investors. By doing so, the homeowners could purportedly buy back their homes after a period of time. In the meantime, they were allowed to live in them.
According to the indictment, Beliveau falsely told the investors that the homeowners were carefully screened to ensure their financial problems were merely situational, and that they were, therefore, 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.
Ultimately, most of the distressed homeowners were unable to make their monthly contract-for-deed payments or otherwise buy back their homes. Many of the loans taken out by the 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 to pay personal expenses. In his plea agreement, the defendant acknowledged that his scheme occasioned losses of more than $2.4 million.
For his crimes, Beliveau faces a potential maximum penalty of 10 years in prison on the monetary transaction count and five years on the failure to pay taxes count. Judge Rosenbaum will determine his sentence at a future date, yet to be scheduled.
This case is the result of an investigation by the U.S. Postal Inspection Service and the IRSCriminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney David J.MacLaughlin.-