An Albertville man was sentenced on Monday to just under 10 1/2 years in prison for his role in a mortgage fraud scheme that cost lenders more than $8 million. Federal prosecutors said his conduct caused substantially more damage than the figure indicates.
John Anthony Spencer, a 31-year-old former mortgage broker at the defunct Minnesota One Mortgage of Maplewood, was convicted after a three-week trial in June of conspiracy to commit mortgage fraud, wire fraud, bank fraud and money laundering.
"Spencer inflicted many millions of dollars in damage to commercial lenders, financial institutions, the secondary purchasers of the bad mortgage paper his activities generated (such as Fannie Mae and Freddie Mac) and to the economy of the United States generally," Assistant U.S. Attorney David MacLaughlin said in a presentence filing.
The $8,163,380 in losses cited in the report minimizes losses from a "broader swath of fraudulent conduct" that Spencer engaged in for the past seven years, MacLaughlin wrote. He cited millions of dollars in losses to U.S. Federal Credit Union and Anoka Hennepin Credit Union that were not included in the presentence report calculations.
It also excludes the damage to the credit scores of unwitting people he recruited to buy properties at inflated prices.
Minnesota One was owned by Chad Wegscheider, who recently pleaded guilty in an apparently separate scheme that defrauded lenders of about $5 million on properties in Minnesota and Wisconsin. That case is related to pending charges against James and Teresa Hoffman of Hastings, who are scheduled to make their first court appearance on Tuesday.
The evidence in the Spencer trial showed that he had brokered fraudulent loans for people who were recruited to buy real estate in Minneapolis, St. Paul and Albertville at inflated prices. The excess was split among Spencer, the buyers he recruited and some accomplices.
Appraiser Bryan Joseph Lenton, 32, of Oakdale and broker Patrick Arthur Dols, 38, of Minneapolis pleaded guilty in March to their roles in providing bogus appraisals and arranging financing based on bogus mortgage applications. They face up to five years in prison and await sentencing.
Dan Browning • 612-673-4493