After 30 years of alleged frauds, bad dealings and dishonesty, a Hastings couple appear to be on the verge of pleading guilty to criminal charges arising from a lengthy federal investigation into an alleged mortgage fraud scheme.

The U.S. attorney's office on Friday made good on its recent threat to issue new charges against Jim and Teresa Gay Hoffman, who were indicted in October on allegations that they had orchestrated a complex scheme to defraud mortgage lenders out of more than $5 million.

But the new charges seem to pare down the original 17-page, nine-count indictment rather than add to it. The government charged the Hoffmans on Friday in separate "felony informations" rather than a second grand jury indictment. That process generally precedes a plea agreement.

Minneapolis attorney Peter Wold, who represents Jim Hoffman, declined to comment on the development, noting that no plea agreement has been filed.

In the new charges against Jim Hoffman, prosecutors realleged the general description of the mortgage fraud conspiracy. But they charged him with just two counts: engaging in a monetary transaction in criminally derived property, and evading the payment of $249,080 in federal income taxes. Teresa Hoffman was charged with a single count: evading the payment of $258,561 in federal income taxes.

The first charge against Jim Hoffman relates to his use of some of the proceeds of the alleged mortgage fraud to make a $20,125 payment to the Institute for Shipboard Education so that one of his children could attend a "Semester at Sea" program. The second count relates to his failure to pay income taxes over the years and an IRS penalty that was assessed in 1998, which arose from his personal bankruptcy petition.

The charging document also reiterates that Hoffman arranged to live in his luxury home in Hastings by using a series of "nominee" owners, which kept it beyond the grasp of the IRS. It says he lived a luxurious life rather than pay his taxes. Between November 2003 and 2009, Hoffman spent nearly $600,000, much of it on lawn services, Caribbean cruises, country club fees, boating, high-end furniture and private school tuition, the government says.

The government alleges that Teresa Hoffman played a direct role in the sale of their Hastings home to a nominee owner in 2006. A waitress and single-mother agreed to buy it for $1.2 million. Prosecutors say the Hoffmans netted $219,429.71 from the transaction. But rather than pay taxes, they say, she put some of the money into accounts held by her minor children.

If a plea bargain does come together, prosecutors would likely drop the conspiracy charge and eight wire fraud charges in the indictment. If no agreement is reached, the indictment remains and the government can still issue more charges in a superseding indictment.

The Star Tribune published a story Monday that examined Jim Hoffman's myriad business enterprises since he dropped out of college 30 years ago to run the family's farm in Renville, Minn., after his father died. Former business associates, creditors and attorneys depicted Jim Hoffman in court records and interviews as a man who'd spent most of his life living large on other people's money, then ducking for cover when the bills came due.

Dan Browning • 612-673-4493