A 52-year-old Chanhassen man who allegedly accepted $580,000 in kickbacks on the sale of six properties pleaded guilty Tuesday in federal court to conspiracy to commit wire fraud.

Douglas Rex Butler was the third person to plead guilty in connection with a $20 million mortgage fraud scheme that involved 57 properties. Former mortgage broker Derrick Ivan Lance, 40, of Edina, and home buyer Roger Bill Hanks, 66, of Coon Rapids, pleaded guilty this summer to one count each of conspiracy to commit wire fraud in the alleged scheme.

In his plea agreement, Butler admitted that between 2005 and 2007, he conspired with others, including Hanks and Lance, to obtain mortgage loan proceeds based on fraudulent documentation. Butler's unnamed co-conspirators recruited buyers for residential properties, telling them they would receive kickbacks after the property transactions closed. Butler was one of those buyers.

The scheme involved submitting false mortgage loan applications that misrepresented the buyers' true financial situation. After the loans were approved, proceeds were disbursed by wire transfer to various title companies. Butler and his co-conspirators then caused those title companies to disburse some of the proceeds into bank accounts not associated with the property buyers in order to conceal the undisclosed kickbacks.

Butler faces a potential maximum penalty of 20 years in prison.

Susan Feyder • 612-673-1723