A real estate salesperson and three unlicensed individuals were fined $3.25 million for their roles in a multimillion-dollar scheme that used forged documents to deceive lenders into approving large loans for unqualified buyers.
In two other schemes, real estate salespeople defrauded lenders by inflating the market value and sale price of residential properties.
Another salesperson persuaded a client to lend her $30,000, which she never repaid.
The Minnesota Department of Commerce took action against 32 people and 21 companies engaged in improper real estate activity in the six months ending in March.
Following are the 10 people and six companies that were fined at least $20,000, according to orders made public by the Minnesota Commerce Department. In some cases a judge determined the parties engaged in improper activity; in others, the parties agreed to sanctions and fines based on the state’s allegations against them.
The first nine individuals and companies are barred from mortgage origination after collaborating in a mortgage-fraud scheme that involved 42 residential properties.
Wendy L. Ober, Hudson, Wis.; James D. Ober, Hudson, real estate salesperson license revoked; Mortgage Planners, Inc., St. Paul. The three share a $1.5 million fine.
Raul Pliego, Minneapolis, $750,000 fine.
Alejandro Sanchez, St. Paul; Accredited Financial, Inc., Hudson, Wis.; Eagle River Financial, LLC, Hudson; OFC Properties, Inc., Hudson; RP New Horizons, LLC, Hudson. The five share a $100,000 fine.
This equity-stripping scheme used a variety of forged documents to qualify “straw buyers” for loans guaranteed by the Federal Housing Administration. Lenders were even supplied with a phone number to call to verify a loan applicant’s employment status, but the phone was answered by a conspirator who gave false information. Many of the properties ended up in foreclosure or short sale.
An administrative law judge found that Sanchez and the four companies engaged in unlicensed real estate and residential-loan work, made improper loans, acted on behalf of multiple parties without disclosing that fact and made false or misleading statements or allowed others to do so.
The Obers were convicted of racketeering in September and each was sentenced to 120 months in prison. They were ordered to pay restitution.
Pliego was convicted of racketeering in September and was sentenced to 48 months in prison.
Sanchez pleaded not guilty to racketeering. His jury trial is set for June 10.
Steven R. Carver, Hopkins, real estate broker and salesperson licenses revoked, notary public commission revoked, $185,000 fine. Carver & Associates Real Estate, Hopkins, $10,000 fine.
A judge found that Carver falsified loan documents by inflating the market value of at least 16 properties. After keeping an amount equal to the true market value, the seller would “loan” the rest of the proceeds to the buyer, who would use it for the down payment. The “seller-financed” loan often was forgiven.
Carver also conducted real estate activity during a period when he was unlicensed. He allowed two unlicensed people to operate Carver & Associates as a property management company. He failed to satisfy four civil judgments against him and gave false statements on a license application.
Envoy Mortgage, Ltd., Houston, Texas, $100,000 fine, $20,000 of which is stayed.