Developer Parish is charged

Longtime home builders Michael and Ardith Parish are expected to plead guilty in an alleged mortgage fraud conspiracy that has pocked some southern Twin Cities suburbs with foreclosures and led to an estimated $50 million in losses on nearly 200 houses.

By Dan Browning, Star Tribune

Last update: October 23, 2007 - 12:58 AM

An alleged mortgage fraud conspiracy that pocked some southern Twin Cities suburbs with foreclosures and led to an estimated $50 million in losses on nearly 200 houses has boiled down in criminal charges to a much smaller number: $114,465.60.

That's the amount the government alleges that Parish Marketing and Development Corp., founder Michael Parish of Eagan and son-in-law Christopher Troup laundered from the conspiracy.

Four people -- an appraiser, a bank loan officer, a real estate closing agent and a straw buyer -- have pleaded guilty in the case since September.

Now, the principal players are planning to plead guilty, too.

Michael Parish and his wife, Ardith, were charged quietly Thursday along with their company and Troup in an alleged mortgage fraud conspiracy that ran from 2003 through last May.

The charge carries a maximum prison term of five years. In addition, Parish Marketing, Michael Parish and Troup face one count each of money laundering, which carries a maximum term of 10 years.

In previous court hearings, the government has said its case involved an elaborate scheme that relied on straw buyers and phony documents to bilk lenders out of tens of millions of dollars.

But the money-laundering charges issued last week reflect just three financial transactions: Parish Marketing wrote a check Feb. 6 for $26,926; Michael Parish bought a 2005 Cadillac CV XLR two years ago for $64,566, and Troup bought a 2007 Chevrolet Avalanche in February for $22,973. Each knew that the money was derived from mail fraud, the charges say.

So what happened to the rest of the estimated $50 million in losses?

Government prosecutors aren't commenting yet.

The defendants agreed to be charged directly by the U.S. attorney's office in lieu of an indictment. Additional information may emerge Nov. 2, when the defendants are scheduled to be arraigned and enter guilty pleas.

Michael Parish's attorney, Peter Wold, said the defendants recognize that they went astray and are trying to make things right by cooperating with the investigation.

"This is a family that was involved in the construction industry building good homes for good people for 30 years," Wold said, calling the events of the last couple of years an "aberration" of their careers.

The money from the alleged scheme went to pay subcontractors and other bills in an effort to stave off financial collapse in a particularly tough housing market, Wold said.

The U.S. attorney's office said Monday that victim restitution would be part of any plea agreement in the case.

Wold suggested that the Parishes don't have much left. "You can do all the investigation you want, but you're going to find very little largesse on the parts of Mike and Ardy Parish," he said. "You're not going to see these people with million-dollar vacation homes around the country and overseas, and things like that."

Michael Parish is still trying to sell the homes to investors or current renters to alleviate losses to mortgage lenders, said Ryan Pacyga, a Woodbury attorney who represents Parish Marketing.

The identity and number of the victims, as well as the amount of the losses, may prompt some contentious legal arguments, Pacyga said. "What would be in dispute right now is, under the law, who is considered a victim," he said.

Possible victims include people who bought the homes on contracts for deed, original lenders, and investors who bought securitized loan packages.

Dan Browning • 612-673-4493

Dan Browning • dbrowning@startribune.com

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