Real Estate Agent Sent to Prison for Kickback Scheme

Allison Tussey —  May 31, 2013 — 1 Comment

Robert Leo Rick, 52, White Bear Lake, Minnesota, was sentenced for his role in a mortgage fraud scheme that defrauded mortgage lenders out of at least $7 million.

United States District Court Judge Susan Richard Nelson sentenced the defendant to three years in prison on one count of conspiracy to commit mail and wire fraud. Rick was charged on December 23, 2011, and pleaded guilty on January 27, 2012.

In his plea agreement, Rick admitted that from 2005 through 2007, while employed as a real estate agent for Rick’s Realty, he worked with developers, builders, and investors seeking to “invest” in residential real estate. Rick admitted soliciting and conspiring with others to secure investors to purchase multiple residential properties, in transactions where those investors, or buyers, would receive undisclosed kickbacks from mortgage loan proceeds.

To generate the funds for the kickbacks, builders sold the homes at reduced prices, appraisers appraised the homes at inflated prices, and the mortgage loan lenders were informed only of the inflated prices, and thus awarded buyers mortgage loans based on the inflated prices rather than the true, reduced sales prices. The excess mortgage loan proceeds were then used to provide the buyers with the promised kickbacks, which were not disclosed to the mortgage loan lenders. All of this was known to Rick.

Through this scheme, Rick assisted builders and developers, including TJ Waconia, to sell approximately 102 residential properties with mortgage loans totaling approximately $26 million. He also served as property purchaser, directly or through the use of his then-wife’s name, for at least eight properties, and received a total of approximately $397,000 in purchaser kickbacks. To further his scheme, Rick admitted using the U.S. mail and commercial carriers, as well as interstate wire communication, to pass along information to investors.

This case was the result of an investigation by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Tracy L. Perzel.

Allison Tussey

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One response to Real Estate Agent Sent to Prison for Kickback Scheme

  1. Mortgage companies have been feeling the brunt of these kind of cases it’s nice to see real estate agents get prosecuted as well.

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