Joseph Traxler, once of Centennial Mortgage, says he helped others in a scheme that authorities say cost banks $8 million.
A former executive with Centennial Mortgage and Funding Inc. pleaded guilty Thursday in a Minneapolis federal court to defrauding various banks in an attempt to cover the company's losses and fund its operations.
Joseph W. Traxler, 63, of Bloomington, was an accountant, senior vice president and chief financial officer for the mortgage company in 2007 and 2008, when the alleged fraud took place. The government contends he's responsible for $8 million in losses, though Traxler may argue that the amount is too high.
Centennial, a Bloomington-based mortgage lender, had warehouse lines of credit with various banks, including American Bank.
Traxler admitted misleading lenders about the status of existing mortgage loans to get them to advance Centennial more money; helping conceal defaults on existing mortgage loans; hiding the fact that about 23 mortgage loans were double-funded; and kiting checks between Centennial's various bank accounts.
Traxler used the money he obtained to make payroll and other operations expenses, the government says.
Traxler said he didn't do all those things personally, but failed to inform the financial institutions about what he knew and aided others in the alleged fraud.
Length of term debated
Traxler's attorney and federal prosecutors couldn't agree on the prison term suggested by federal sentencing guidelines. Depending on who's right, it's either 63 to 78 months, or 78 to 97 months. Both sides reserved their rights to argue for greater or lesser time than the guidelines recommend. But Traxler agreed not to appeal if he gets 63 months or less.
Traxler also will be required to pay an undetermined amount of restitution.
Dan Browning • 612-673-4493