Final defendent sentenced in mortgage scheme

The last of First Rate Mortgage conspirators was sentenced in federal court.

By JAMES WALSH, Star Tribune

Last update: August 12, 2008 - 3:45 PM

The last of six defendants who pleaded guilty to running a fraudulent mortgage brokering business was sentenced by U.S. District Judge Joan Ericksen last week.

Christopher E. Septon, 35, Big Lake, was sentenced on Aug. 7 to two years in prison, three years supervised release and ordered to pay -- along with his co-defendants -- $2.3 million in restitution.

Septon was one of the co-conspirators of the First Rate Mortgage scheme, in which they defrauded financial institutions and private mortgage lenders. Specifically, First Rate Mortgage Group said that, for a fee, they could help people obtain financing for the purchase of real estate. To enact the scheme, they mailed false and fraudulent loan applications to banks and mortgage lending companies, which concealed the fact that First Rate Mortgage had loaned the money for a downpayment to the homeowner -- enabling the homeowner to qualify for a larger mortgage. They also inflated borrowers' income and assets, falsely described the borrowers' employment, contained forged signatures and attached false documents.

Previously sentenced were Sean B. Leaf, 35, of Woodbury, Joddilee M. Lindberg, 50, of Minneapolis, Micah D. Thormodsgaard, 25, of St. Paul, Edward A. Septon, 59, of Naples, Fla., and Christopher A. Horton, 34, of Minnetonka. All six defendants pleaded guilty last fall to one count of conspiracy to commit mail fraud and bank fraud. In addition, Edward Septon pleaded guilty to one count of bank fraud. All six were charged on Aug. 8, 2007.

The case was the result of an investigation by the FBI and the U.S. Postal Inspection Service.

James Walsh • 612-673-7428

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