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Jeffery J. Detloff, Lori K. Detloff and Detloff Marketing and Asset Management Inc., have been indicted today on charges of conspiring to commit mail fraud and wire fraud for participating in a long-running conspiracy to defraud companies, including financial institutions, in connection with foreclosed properties in the Minneapolis area and elsewhere from in or about September 2007 and continuing through in or about June 2015.

Jeffery Detloff, a realtor who sold and managed foreclosed Minneapolis, Minnesota properties on behalf of victim companies worked alongside his wife, Lori Detloff, an accountant for Jeffery Detloff and associated companies, in committing the fraud.  The Detloffs conducted their real estate business through Detloff Marketing.  In addition to the conspiracy charge, the indictment includes four counts of wire fraud and four counts of mail fraud.

According to the indictment, the Detloffs devised a scheme requiring repair contractors to pay the Detloffs kickbacks.  In return, Jeffery Detloff used his position as a realtor for the victim companies to steer housing repair contracts to contractors who paid the kickbacks.  The contractors paid kickbacks to the Detloffs through Detloff Marketing.  The indictment further alleges that Jeffery Detloff procured and submitted sham bids as part of the scheme to defraud the victim companies.  One housing repair contractor has already pleaded guilty in connection with this investigation.

This is the second case involving fraud and kickbacks relating to repair contracts for properties in the Minneapolis area owned by financial institutions.  The maximum penalty for wire fraud affecting a financial institution, mail fraud affecting a financial institution, and conspiracy to commit mail and wire fraud affecting a financial institution is 30 years of imprisonment and a fine of $1,000,000.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Department of Justice made the announcement.

This indictment affirms the Antitrust Division’s commitment to protecting the American housing market from fraud,” said Assistant Attorney Makan Delrahim of the Department of Justice’s Antitrust Division.  “We will continue to work with our law enforcement partners to protect the integrity of the competitive process.”

As alleged, the defendants created a scheme to siphon as much money as they could from these properties, no matter the method, no matter the victim,” said FBI Special Agent in Charge Jill Sanborn of the Minneapolis Division. “These scams victimize all of us, and the FBI and our law enforcement partners will continue to unravel these schemes and hold accountable anyone found responsible for defrauding the system.”

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The charges are the result of a federal investigation of housing repair contracts in the  Minneapolis area.

Timothy Thomas Kes, a former Lonsdale realtor who pleaded guilty in April to mortgage fraud, was sentenced July 3, 2018 to 30 days in jail and five years probation.

Source: Jail, probation for ex-Realtor convicted of mortgage fraud | News | southernminn.com

Jesse Wells Haug, 33, Rosemount, Minnesota, pled guilty yesterday to one count of wire fraud.

According to the defendant’s guilty plea and documents filed in court, Haug is the owner of a Twin Cities-based construction company called 7-10 Services, LLC. From 2015 through the end of 2016, Haug executed a scheme to defraud investors by falsely representing to them that he would use their money to purchase and renovate residential real estate, and, in exchange, he would share the profits when the properties were re-sold, or “flipped.”

According to the defendant’s guilty plea and documents filed in court, during the course of the scheme, Haug obtained $880,000 from two victim-investors to purchase and renovate residential properties located throughout the Twin Cities. During the course of Haug’s interactions with the victim-investors, Haug used false documentation showing how the investment money was being used, false information about upcoming real estate closings and re-sales of properties Haug claimed to have flipped, as well as fictional documents showing “returns” from the so-called investment properties. In reality, Haug spent the investment money on personal expenses and never purchased or sold any of the properties.

United States Attorney Gregory G. Brooker made the announcement.

This case is the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.

Assistant United States Attorneys Kimberly A. Svendsen and Charles J. Kovats are prosecuting this case.

Solomon Gordon Raymond, also known as Paul Anthony Raymond, 54, Golden Valley, Minnesota, was sentenced to 57 months in custody for lying to banks on a series of business loan applications he used to take almost $500,000.

In addition to punishing Raymond for his fraudulent crimes, U.S. District Judge Roger T. Benitez increased Raymond’s sentence for the lies he told during testimony at his May 2015 trial. During the hearing, Judge Benitez described the defendant as “one of the worst con men I have ever seen.” Raymond was taken into custody at today’s sentencing hearing to immediately begin serving his sentence. Continue Reading…

Jeffery Allen Gardner, 61, Hopkins, Minnesota, and Stuart Alan Voigt, 66, Apple Valley, Minnesota, have been indicted and charged with conspiring to defraud individuals and financial institutions, bank fraud and making a false statement in a loan application.

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Justin Joseph Christenson, 35, Forest Lake, Minnesota, admitted conspiring with Thomas Rosensteel, Robert Scott “Rod” Aslesen, and at least four others to defraud mortgage lenders by falsifying loan applications and related documents. Continue Reading…

Michael John Mangan, 43, owner of multiple Minnesota-based businesses, has been indicted and charged with four counts of wire fraud and three counts of mail fraud for allegedly stealing over $1 million of real estate investment funds and loans.

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Timothy Jon Oliver, 60, a Minnesota attorney, pleaded guilty to felony wire fraud for his role in scheme wherein he took funds from a construction company to secure financing for a nonexistent real estate development project.

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Thomas Edward Rosensteel III, 41, Excelsior, Robert Scott “Rod” Aslesen, 65, Little Canada, Justin Joseph Christenson, 34, East Bethel, and Dale Russell Wurzinger, 57, Burnsville, Minnesota, have been indicted and charged in connection with the Split Rock Realty mortgage fraud investigation.

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John Michael Stevens, 47, Lakeville, Minnesota, pleaded guilty for his role in a scheme to defraud mortgage lenders in connection with the sale of condominiums at the Chateau Ridge development in Burnsville, Minnesota.

 

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