Sentence handed down in Sexton case

  • Article by: JANET MOORE , Star Tribune
  • Updated: January 31, 2012 - 10:38 PM

A Bloomington man got 50 months after admitting to money laundering.

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The Sexton Lofts and Condominiums, at 521 S. 7th St. in Minneapolis, was the site of a mortgage fraud scheme.

Photo: Glen Stubbe, Star Tribune

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A Bloomington man was sentenced Tuesday to 50 months in prison for his role in a $2.5 million mortgage fraud involving the sale of condominiums in the Sexton Lofts building in Minneapolis.

Gerald James Greenfield, 66, was also fined $10,000 for one count of conspiracy to commit money laundering and was ordered by U.S. District Judge Patrick Schiltz to forfeit assets valued at "hundreds of thousands of dollars," according to a news release issued by the U.S. attorney's office.

The seven-story converted commercial building is at 521 S. 7th St.

In his plea agreement, Greenfield admitted that he and others began laundering money from the mortgage scheme in September 2006. Brett Thielen, of Savage, sold condos in the building during a market downturn by recruiting financially unqualified buyers and inducing mortgage lenders to lend them money.

According to the U.S. attorney's office, the condo prices were artificially inflated, creating substantial profits. Thielen and Greenfield hid the money by wiring it to an attorney in Australia.

The unnamed attorney, who has not been indicted, then wired portions of the profit to "other places" to make them appear legitimate. In some cases, Greenfield directed the attorney to wire the ill-gotten gains to a brokerage firm to purchase stock in a company called Digital Town Inc.

During the investigation, an undercover law enforcement officer met with Greenfield at Manny's steakhouse in Minneapolis in June 2009. At that meeting, Greenfield agreed to help the officer launder $50,000 in alleged drug trafficking profits by converting the funds to Digital Town stock.

In December 2010, Thielen, 43, was sentenced to 27 months in prison for one count of conspiracy to commit mortgage fraud through the use of wires and one count of money laundering.

Greenfield was indicted along with Nicholas Ryan Delon Smith, who pleaded guilty in May 2010 for participating in the scheme between August 2006 through April 2007. At the time, Smith was the owner of a mortgage brokerage company in Minneapolis called Heloc Inc., where he falsified income and employment information about his straw buyers in an effort to convince lenders they were creditworthy applicants, according to the U.S. attorney's office.

In return, Smith received kickbacks from loan proceeds following the sale of the condo units. On Dec. 5, 2006, Smith wire transferred $25,500 in illegal proceeds from his company's bank account to a third party to buy a car, the U.S. attorney's office said.

Smith, 32, of Prior Lake, was sentenced in January to 40 months in prison for one count of conspiracy to commit mortgage fraud through the use of wires and one count of money laundering. He pleaded guilty in May 2010.

Greenfield declined to comment through his attorney, Ron Meshbesher of Minneapolis.

Janet Moore • 612-673-7752

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