Home Builder Sentenced for Defrauding Mortgage Lenders

admin —  February 24, 2010 — Leave a comment

Ty Joseph Caswell, 41, Zimmermann, Minnesota, was sentenced in federal court for defrauding lenders into making home loans for amounts exceeding the actual values of the properties involved. Caswell was given 24 months in prison on one count of mail fraud. He continued the issue of restitution for 90 days. Caswell was charged on May 4, 2009, and pleaded guilty on May 22, 2009.

Per court information, from July 2006 to October 2007, Caswell, a residential home builder, doing business as Tyson Homes, built a number of houses ranging in price from $252,000 to $390,000. To make these homes more saleable, Caswell concocted a scheme to provide prospective purchasers with 100-percent financing and, yet, convince lenders their loans were secure. Caswell did this by obtaining inflated home appraisals. Then, at closings, he personally paid the difference between the loan amounts and the bogus appraisal amounts but represented to the lenders that those payments were being made by the purchasers. Prior to the closings, Caswell also wrote checks to the purchasers so they could prove to the lenders they had funds on deposit to cover the payments they were going to make at the closings. However, after the bank balances were verified by the lenders, Caswell cancelled payment on the checks.

One such fraudulent transaction involved the sale of a home in Isanti, Minnesota, on January 8, 2007. Caswell knew the home was valued at approximately $268,700, yet he obtained a bogus appraisal of $313,000. Based on that appraisal, the lender agreed to finance $281,700. Therefore, at closing, Caswell paid the difference of $32,517.94 with a cashier’s check ostensibly from the purchaser. Then, after closing, he caused the fraudulent closing documents to be sent through the U.S. mail. In all, Caswell sold 12 homes in this manner, causing lenders to lose more than $1 million when property values dropped, leaving them unable to recover sufficient funds from their collateral.

This case was the result of an investigation by the Internal Revenue Service-Criminal Investigation Division and the Sherburne County Sheriff’s Office. It was prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.

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