Ohio woman says she lent her name to fraud

A stay-at-home mom from Ohio admitted in federal court Thursday that she let participants in an alleged mortgage fraud conspiracy use her name and credit so they could buy 46 properties in some southern Twin Cities suburbs.

Melissa D. Smith, 43, admitted that between 2004 and January of this year, she misled lenders who called to check on her income, never put any of her own money down on the properties, and allowed people working with a home builder to sign her name on real estate and loan documents. On occasion, individuals working for the home builder gave Smith checks with instructions to pay down her credit card debts so she could continue to borrow money, according to her plea agreement.

Smith, who is cooperating in the investigation and prosecution, faces an expected sentence of 37 to 46 months in prison. The government characterized her role in the alleged scheme as minimal.

Smith is the third defendant to plead guilty in the case, joining a closing agent and a bank employee.

The government said in those cases that the alleged conspiracy involves nearly 200 properties, $100 million in mortgage proceeds and as much as $50 million in losses.

Purchases made in Smith's name totaled about $20 million, which the government says resulted in losses of about $10 million.

Under questioning by Assistant U.S. Attorney Joseph Dixon, Smith confirmed that she got paid $2,000 for each transaction, or about $100,000 total. Her plea agreement indicates that Dixon and her attorney, Assistant Federal Public Defender Manny Atwal, may argue about the alleged losses, however.

Court documents identify the home builder orchestrating the scheme only as "Company A." The Star Tribune confirmed through property records and sources that it is Parish Marketing and Development Corp. of Eagan.

Investigators suspect Parish Marketing used straw buyers, including some relatives, to buy multiple homes at inflated prices. The scheme unraveled as the housing market slowed, new buyers could not be found and houses ended up in foreclosure.

Real estate records show that Christopher Troup, the son-in-law of Mike and Ardith Parish, who run the home-building company, was involved in at least 29 transactions. Troup is Smith's brother, said Ryan Pacyga, an attorney for Parish Marketing.

Neither Mike nor Ardith Parish has been charged. Pacyga said Thursday that they are working to resolve any outstanding foreclosures by searching for large-scale investors to buy out the banks that hold the notes on the properties.

Dan Browning • 612-673-4493

Dan Browning • dbrowning@startribune.com