Hennepin County investigators are probing mortgage fraud complaints involving a Brooklyn Park mortgage company that allegedly used straw buyers to buy property at inflated prices. The county is investigating Universal Mortgage and several of its employees, according to a search warrant affidavit filed by a county investigator.

Universal's practice of using straw buyers was detailed by the Star Tribune in June. One of those straw buyers was a 22-year-old exotic dancer who said she bought 10 properties through Universal; she's now cooperating with the county attorney's office, according to the affidavit. She and four other buyers whose experiences are detailed in the affidavit said they purchased a total of 25 properties through Universal.

The case is the latest in the multiplying number of mortgage fraud allegations made by county and federal investigators in either formal criminal complaints or statements to support seizure of mortgage records. The number of properties involved runs into the hundreds.

Hennepin County Attorney Michael Freeman said he has no way to know how much of the current wave of property foreclosures is attributable to fraudulent activity.

"I think the scams are deeper and there's more of them than I thought. And they're ongoing," said Freeman. His white-collar crime unit has filed four sets of charges alleging mortgage fraud against defendants since he took office this year.

"I think the scams are serious enough and ongoing enough that it's worth our time if we can scare enough people that we're watching them and coming after them. Also, if we can alert people that if things sound too good to be true, they are."

The affidavit was written in support of a search by investigators of records of property dealings involving Universal and several related companies. Also sought were property records involving Donald Walthall, Universal's owner; Andre Bellfield, a former employee; and Marlon Pratt, who also worked at Universal. Walthall didn't return a call and the others couldn't be reached for comment.

But Irene Thomas, the dancer, now 24, said in an interview Thursday that she's been cooperating with the county. She ended up buying 10 properties through Universal and said she was introduced to Universal loan officer Rahmeen Underwood by an intermediary, Cleveland Fields. The state has since barred Underwood from originating mortgages.

Thomas bought the 10 houses in 90 days last year, all financed through Universal and nine of them previously owned by Universal officials. She says that the company duped her by selling the properties to her at inflated prices, and she said she wound up with bad credit after payments weren't made out of rental proceeds as Fields had promised.

She said Fields gave her $5,000 in cash for the purchase of one property, deposited money into a bank account he directed her to open, covered her closing costs and directed to whom she should make money orders payable for closing costs. Thomas said Fields promised to give her $200,000 from accrued equity after they resold the homes, the affidavit states.

Fields couldn't be reached Thursday, but earlier this year he accused Thomas of trying to shift blame for a real estate deal that went bad.

Thomas has acknowledged her loan applications contained false information about her job status, personal finances and her intent to live in the homes, according to the affidavit. But she said she didn't fill in the applications, and merely signed them.

"I never dealt with anything with real estate in my life," she said Thursday. "I don't feel like I'm guilty of anything. I'm naive."

Straw buyers can be either willing participants in fraudulent schemes, or naive buyers who were duped, according to Freeman. He said that the more properties a straw buyer acquires, the less sympathy he has for that buyer. But sometimes, he said, his office needs witnesses who may have been participants to help build a case against the central suspects.

Steve Brandt • 612-673-4438