Real Estate Agent Admits Victimizing Lenders

Allison Tussey —  March 15, 2012 — Leave a comment

Barbara Lynnae Puro, 49, Savage, Minnesota, a real estate agent, pleaded guilty to participating in a multi-million-dollar mortgage fraud scheme that victimized lenders across the country.

Puro specifically pleaded to one count of conspiracy to commit wire fraud. Puro, who was indicted on September 8, 2011, entered her plea before United States District Court Judge Joan N. Ericksen. She did not enter a plea agreement.

The indictment against Puro states that from January 1, 2005, through January 1, 2008, she conspired with others to obtain loan proceeds by making false representations to and withholding material information from lenders. During that time, she was employed by HomStar USA, ReMax Advantage Plus, and Coldwell Banker Burnet, where she was responsible for recruiting and representing buyers and sellers of residential properties.

Puro also owned TRAE, Inc., a corporation associated with her real estate endeavors.

As part of this scheme, Puro arranged for unwitting homeowners to sell their properties to straw buyers at inflated prices. In each instance, she funneled to co-conspirators the difference between the amount paid to the seller and the inflated sale price. In addition to representing these sellers, Puro often represented straw purchasers too. On their behalf, she routinely produced fraudulent documentation for lenders and title companies. She also regularly caused loan proceeds to be disbursed to her co-conspirators or into accounts that she controlled. In addition to receiving concealed disbursements, Puro also collected substantial real estate commissions that exceeded industry standards.

Puro and her co-conspirators convinced straw buyers to purchase approximately 22 residential properties in Minnesota, resulting in fraudulent loans in excess of $10 million and losses of approximately $5.3 million. The properties included locations in Savage and Prior Lake, Minnesota.

For her crime, Puro faces a potential maximum penalty of 20 years in prison. Judge Ericksen will determine her sentence at a future hearing.

On September 15, 2011, co-conspirator Zack Zafer Dyab, 47, Golden Valley, Minnesota, was sentenced to 120 months in prison on one count of conspiracy to commit wire fraud and one count of money laundering in connection to this crime. Dyab was indicted along with Julia Alexander Rozhansky, 47, Minnetonka, Minnesota, on December 8, 2009. Both defendants pleaded guilty on October 26, 2010.

On September 16, 2011, Rozhansky was sentenced to 60 months on one count of conspiracy to commit wire fraud. On July 12, 2011, Larry Africanus Hutchinson was sentenced to 21 months on one count of conspiracy to commit wire fraud. Also on July 12, 2011, Jerone Ian Mitchell was sentenced to 12 months and one day on one count of conspiracy.

Ericvan Anthony McDavid is scheduled to be sentenced on March 30, 2012.

This case is the result of an investigation by the Federal Bureau of Investigation, the Minnetonka Police Department, and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Christian S. Wilton.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Allison Tussey

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