A man indicted for running one of the state's larger mortgage fraud schemes was sentenced Thursday to six years in prison.
Michael Prieskorn, 37, formerly of Minnesota and now living in Florida, was also ordered by U.S. District Judge Paul Magnuson in St. Paul to pay victims an as-yet-undetermined amount of restitution. Prosecutors have argued that the scheme, which involved scores of properties, cost mortgage lenders at least $20 million.
The sentencing marks the end of a multiyear legal drama that began in 2008 when Prieskorn failed to report to an administrative hearing at the Minnesota Department of Commerce over allegations of fraud.
Victims say Prieskorn hastily shut down the companies he operated in the mid-2000s in Minnetonka, called Blackstone Sales and Main Estates, and couldn't be found.
He had marketed "risk-free" real estate investments in which people were paid cash in exchange for using their names and credit to buy properties in Minnesota and Florida.
The Internal Revenue Service arrested him in Florida in early 2010, and he pleaded guilty to two charges: conspiracy to commit wire fraud and to an illegal monetary transaction involving $225,000.
Frederic Bruno, Prieskorn's attorney, said that the judge granted their request to ease the sentence because Prieskorn accepted responsibility for his actions and made an early plea.
"He's been living under this cloud since then," Bruno said. "We're pleased with the result."
At least one victim was not. Michael Herr, a computer programmer who lives in Brooklyn Park, said he's happy Prieskorn will be behind bars but that the sentence isn't long enough considering the damage Prieskorn caused.
"He's hurt a lot of people," said Herr.
Herr said he bought seven investment properties for $3.5 million through Prieskorn's operation and that his credit was destroyed.
"I'm broke, 51 years old, living check to check," Herr said. "I'll never be able to retire."
Jennifer Bjorhus • 612-673-4683