Tuesday, February 05, 2008
Minnesota Broker Sentenced to 5 Years
Ronald Clark Joseph, 49, Prior Lake, part-owner of LHS Mortgage, Inc., was sentenced to 63 months in federal prison by United States District Court Judge Donovan Frank for his role in a mortgage fraud kickback scheme.
As previously reported by Mortgage Fraud Blog, on July 2, 2007, Joseph pleaded guilty to one count of mail fraud and one count of money laundering. Joseph, a licensed mortgage broker, devised and implemented a scheme to defraud mortgage lenders out of millions of dollars between 2004 and 2006. He caused fraudulent loan applications to be provided to potential lenders that misrepresented the terms of the proposed transactions by, among other things, overstating property purchase prices. After a loan was approved, loan proceeds were provided to a title company. Joseph then worked with a closing agent at the title company to disburse concealed payments from the loan proceeds to property buyers and third parties, including himself.
Joseph and LHS Mortgage, Inc. were involved in approximately 40 separate real estate transactions, involving more than $18 million in loan proceeds and $2.5 million in concealed kickbacks. Joseph is the fourth defendant in the case to be prosecuted and sentenced.
A LHS Mortgage, Inc. employee, Mario Augustin Lewis, 37, Minneapolis, Minnesota, was sentenced to four-and-a-half years in prison.
Isadore Stewart, 40, Stillwater, Minnesota, a buyer who obtained concealed kickbacks on three properties, was sentenced to 18 months imprisonment.
In addition, the closing agent involved in the scheme, Jill M. Lehn, 40, Prior Lake, Minnesota, was sentenced to two years in prison. Lehn benefitted from a departure from the applicable guidelines that was granted by the district court based on Lehn‘s ongoing cooperation with law enforcement in its investigation of mortgage fraud.
“The sentence sends a clear message to those involved in the mortgage industry that fraud will not be tolerated and will be met with significant punishment,” said acting U.S. Attorney
Frank J. Magill. “This office recognizes the significant, detrimental impact mortgage fraud has had on our communities and is aggressively pursuing those responsible.”
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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.
More Trial Coverage
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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 
