Monday, October 20, 2008
Former Operators Of Highgate Manor Indicted In $26M Mortgage Fraud Scheme
Benjamin Osmanson, 29, Sarita, Texas, and Jillian Protzman, 26, Essex, Vermont, have been indicted for their roles in a scheme to defraud mortgage lenders by submitting false loan applications in the names of “investors.” On Thursday, October 2, 2008, a federal grand jury in Burlington, Vermont returned an eleven-count indictment charging Osmanson and Protzman with, among other offenses, conspiracy to commit wire fraud and money laundering related to their scheme to defraud. Osmanson was arrested in Texas and will appear in Federal Court in Corpus Christi, Texas, for a bail and removal hearing. Protzman surrendered to the FBI in Burlington, Vermont. She appeared in Federal Court in Burlington and was released on a variety of bail conditions.
The eleven-count indictment alleges that from at least as early as January 2006 through at least April 2007, defendants Osmanson 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, Protzman, 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.
The United States Attorney emphasizes that the charges contained in the indictment are merely accusations and that the defendants are presumed innocent unless and until they are proven guilty. If they are convicted, Osmanson and Protzman face maximum possible terms of imprisonment of up to five years on the conspiracy count, 30 years on each count of wire fraud, and 10 years for each count of money laundering; however, the actual sentence in the event of a conviction will be determined in accordance with the federal sentencing guidelines.The 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. Protzman is represented by Mark Kaplan, Esq.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
