The Hennepin County attorney's office has charged two people with racketeering and theft in an alleged mortgage fraud ring that dealt in properties from Richfield to Champlin.

Edward L. Boler, 36, and Susan E. Newell, 37, both of Minneapolis, each were charged with a dozen counts of theft by swindle and one of racketeering. Both were arrested and released on bail. Neither could be reached for comment.

The prosecution grew out of an arson finding by county investigator Glen Miller after a house burned in January in Brooklyn Center. Miller found that the property was one of six in foreclosure and one of seven that had been purchased in a short time by Brian White.

That led investigators to Demetrius Winston, who bought five properties in a two-week period. They say that Newell recruited the buyers and that Boler obtained mortgage loans based on fraudulent applications. Newell, Boler and each buyer split the proceeds resulting from obtaining a mortgage greater than the property's cost, according to a complaint.

The case is the third prosecution of mortgage fraud filed by an increasingly aggressive targeting of white-collar crime under County Attorney Mike Freeman. Predecessor Amy Klobuchar deferred to federal prosecutors on mortgage fraud and property flipping cases.

Prosecutors charge that Boler and his U.S. Mortgage Investments Richfield fraudulently obtained loans totaling $2.8 million on 12 properties, eight of them in Minneapolis and one each in Richfield, St. Paul, Champlin and Brooklyn Center.

According to the criminal complaint, Winston was working as a nursing assistant for a base pay of $25,000 a year, but loan applications listed his pay as $60,000 or more. It said that White's income also was overstated, and that he falsely represented that he would be the owner-applicant of all seven properties.

The sheriff's office, state fire marshal and Minnesota Department of Commerce also helped in the investigation.

Steve Brandt • 612-673-4438

Steve Brandt • sbrandt@startribune.com