Lawyer Admits $3M Mortgage Fraud Scheme

Allison Tussey —  February 16, 2010 — 3 Comments

Jason Eric Fischer, 38, Hudson, Wisconsin, a lawyer, pleaded guilty to mortgage fraud by stealing more than $3 million from the escrow account at the real estate title and settlement company he jointly owned. Fischer pleaded guilty to one count of mail fraud and one count of money laundering in connection to his crime. Fischer was charged by way of an Information on January 28, 2010.

In his plea agreement, Fischer admitted that from 2006 through May 2009, he orchestrated a scheme to divert funds from the escrow account at Real Source Title, a company he jointly owned and managed. The company, which had offices in Mahtomedi and Burnsville, Minnestota in addition to Illinois and Hudson, Wisconsin, routinely accepted wire transfers and checks from buyers and lenders. Those funds were to be held in escrow for the sole purpose of closing residential real estate transactions.

To further his scheme, Fischer represented to buyers, lenders, underwriters, and others that the money deposited into the company’s escrow account was, in fact, used only to close real estate transactions. He made those representations by producing and mailing false HUD-1 settlement statements to people of interest. In truth, however, Fischer regularly withdrew escrow-account money to pay for personal and business expenses as well as fund prior company real estate transactions. In 2008, for example, Fischer invested approximately $500,000 in escrow dollars into the opening and operation of a restaurant.

Between 2006 and May 2009, Fischer diverted approximately $3 million from the escrow account at Real Source Title; and by May 2009, the account was depleted and unable to fund 15 loans. As a result, buyers, sellers, lenders, underwriters, and others suffered significant financial loss.

Specifically regarding the mail fraud count, Fischer sent a fraudulent HUD-1 settlement statement to Wells Fargo Bank by way of commercial carrier on April 16, 2009. As to the money laundering count, Fischer caused a monetary transaction to occur involving $12,153.72 in proceeds from the illegal scheme.

For his crimes, Fischer faces a potential maximum penalty of 20 years in prison on the mail fraud count and 10 years in prison on the money laundering count. Judge Patrick J. Schiltz will determine his sentence at a future date.

This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Chris Wolfe.

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Allison Tussey

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3 responses to Lawyer Admits $3M Mortgage Fraud Scheme

  1. Rae Lynn Saalman May 20, 2010 at 4:22 am

    $3million???? Dam I should have asked for a raise?? Poor Jason you lost your house & cabin (vacation home) Hope your bird gets adopted. John is going to miss you once you go to the big house. Kevin is turning in his grave.

  2. I am a victim of the same scheme by a national “big name” title company attorney/escrow agent. Is the title company held responsible for repaying the money stolen? The article talks about what will likely happen to the one being charged, but what about the victims? Are they paid by an insurance policy that protects them from this type of claim?

  3. Richard Stabile Bergen County Real Estate February 17, 2010 at 12:34 am

    Where do these “professionals” think they are going here? Do they really think that they can get away with this kind of stuff? I don’t get it.

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