Chaska man is sentenced seven years in mortgage scheme

  • Article by: ROCHELLE OLSON , Star Tribune
  • Updated: February 20, 2009 - 11:35 PM

He ends up jailed right away after heated hearing over appeals. Sentencing for cohort was delayed until early March.

In a hearing marked by delays and discord, a Chaska man who was president of a home-building company received a seven-year prison sentence Friday for his part in a mortgage fraud scheme in the southwestern suburbs.

Scott R. Rosenlund, 58, was immediately taken into custody at the end of a contentious 90-minute session in Hennepin County District Court after Judge Mary DuFresne reversed her own decision from moments earlier about whether Rosenlund should be jailed pending appeals.

The judge initially had said Rosenlund, who was president of the 10Spring Homes construction company, could remain free. But then she set bail for him at $50,000 and agreed to hear arguments next month on whether he should be freed at all. Setting the bail prompted deputies to take him into custody.

The hearing concluded with many of Rosenlund's family members hugging and in tears. His lawyer, Robert Sicoli, said Rosenlund is the father of 10 and grandfather of 18 who was trying to build the company into a legacy for his family. Rosenlund funneled his earnings back into the company, did not spend lavishly and never took a salary above $100,000 for himself, Sicoli said.

In sentencing Rosenlund, DuFresne raised the specter of an economy in which businesses and banks are tanking and invoked the names of jailed Minnesota businessman Tom Petters and disgraced New York money manager Bernard Madoff.

"No one is above the law," she said. "We have lawyers in prison, we have judges in prison, we have businessmen in prison."

The court was expected to also sentence Shinon Lindberg, of Greenwood, on Friday for his part in the scheme. But DuFresne was unable to do so because the judge had misplaced and not read the brief filed by his lawyer, Howard Bass. The judge granted Bass' request for a sentencing delay so she could review his brief.

Lindberg now will be sentenced on March 4, when lawyers also will argue whether Rosenlund should be free pending the appeal his lawyer said will be filed imminently.

The two were found guilty in December of multiple counts of racketeering and theft. Other charges are pending in a fraud estimated by prosecutors to total about $100 million. Defense lawyers dispute that number. Civil lawsuits also have been filed.

Rosenlund, as president of 10Spring Homes, and Lindberg, who recruited straw buyers for the properties, were accused of orchestrating a scheme along with Celeste Sklar, of Orono. Sklar pleaded guilty last spring to one count of racketeering, but court testimony Friday indicated she wants to withdraw the plea.

The three were accused of buying properties and then reselling them to straw buyers, often on the same day, at inflated prices. They were also accused of inflating the income of the straw buyers to qualify them for mortgages. The three would then split with the straw buyer the difference between what they had paid for the homes and the mortgages taken out by the straw buyers. They told the buyers that the properties would be resold and their loans would be repaid, but instead the homes fell into foreclosure.

Assistant County Attorney Emery Adoradio asked for more than eight years in prison for Rosenlund and Lindberg, citing the men's convictions for seven swindles involving $6 million. "This case involved real people, real lenders, real businesses, real crimes and law enforcement spending huge hours," Adoradio said.

Sicoli argued for leniency, saying the crimes didn't involve violence or force and banks may have been implicated. "In the industry at the time, people were handing out money like it was going out of style," he said. Sicoli said an eight-year sentence would be "overkill," and he accused the prosecution of politicizing the case. He said his client didn't have an intent to defraud.

DuFresne countered, "Whatever was going on in the industry does not forgive criminal behavior."

During the hearing, Sicoli repeatedly criticized Adoradio's handling of the case, at one point saying to him, "It would be nice of you to come to court prepared" when the prosecutor had to return to his office to get his calendar and said he was unprepared to argue on Friday whether Rosenlund should be jailed immediately.

Rochelle Olson • 612-673-1747

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