A couple and their son-in-law in the wide-ranging scheme face from five to 14 years in prison.
The principal players behind a giant mortgage fraud conspiracy that beset several southern Twin Cities suburbs and cast a pall over the area's housing market pleaded guilty to felony charges Friday in U.S. District Court.
Michael Parish, 62, president and owner of Parish Marketing and Development Corp., admitted to constructing the wide-ranging conspiracy that bilked lenders on nearly 200 properties that the company had built in New Prague, New Market and Lonsdale over the past few years.
The company, which also pleaded guilty in the case, earned at least $25 million on $100 million in loans that Parish and his co-conspirators, all of Eagan, had obtained by using "straw buyers" to purchase the homes. In its plea agreement, the company admitted to using the money to keep building homes, to make payments on some of the mortgages and to keep the scheme going.
But the declining housing market caught up with the scheme and the homes began slipping into foreclosure.
The government estimates the losses at as much as $50 million. Parish and his co-conspirators say that's an exaggeration.
The amount of the losses and the number of victims can affect the sentence recommended under federal guidelines.
Parish pleaded guilty to conspiracy to commit mortgage fraud and a single count of money laundering. If the government's calculations are correct, he faces a prison term of between 11 and 14 years, plus two or three years on supervised release and restitution to be determined later.
His wife, Ardith, 61, admitted to playing a minor role in the conspiracy as a company officer and its bookkeeper. She faces a maximum term of five years in prison, plus two or three years of supervised release and restitution.
Christopher Troup, 39, is a son-in-law of the Parishes who acted as a straw buyer on 60 properties, helped recruit other straw buyers, and created bogus documentation to qualify borrowers for larger loans and to substantiate inflated property appraisals.
Troup pleaded guilty to conspiracy and one count of money laundering. The government estimates his recommended sentence at 9 to 11¼ years, plus two or three years of supervised release and restitution.
'Dust hasn't settled'
Eight defendants have pleaded guilty in the conspiracy -- so far, Assistant U.S. Attorney Joe Dixon said. He declined to comment on whether additional charges might follow.
Dixon told U.S. District Judge Ann Montgomery that the case developed so fast that "the dust hasn't completely settled."
Ordinarily, such complex white-collar crimes take several years to investigate and prosecute. But the FBI and the criminal division of the Internal Revenue Service spent just a couple of months on the Parish Marketing case before the government decided to file charges.
Dixon told Montgomery that part of the reason for moving so fast was to minimize damages from pending foreclosures and to provide some "certainty and stability" for the affected communities.
Both the prosecutor and the defense attorneys asked Montgomery to appoint a receiver for the properties so that they can be sold, and to keep some current renters in place.
Dixon told Montgomery that he expects she'll need to hold a hearing to determine the number of victims and the amount of losses before sentencing the defendants, who may dispute the severity of the damages and have reserved their right to seek a sentence below the advisory guidelines.
Peter Wold, the attorney for Michael Parish, said he had already approached Minneapolis lawyer William Selman to act as a receiver because he has both bankruptcy and federal criminal experience.