Two men who helped the developer of the Sexton Lofts in downtown Minneapolis run a $2.5 million mortgage fraud scheme pleaded guilty to federal charges Monday in U.S. District Court in St. Paul.
Gerald J. Greenfield, 64, of Bloomington, and Nicholas R. Smith, 30, of Prior Lake, admitted conspiring with developer Brett Thielen in 2006 and 2007 in the fraud, prosecutors said.
Thielen, 40, recruited unqualified buyers for Sexton condos, and defrauded mortgage lenders by inflating the selling prices and pocketing the profits. He earlier pleaded guilty and awaits sentencing.
Under a plea deal, prosecutors recommended that Greenfield spend up to four years and nine months in prison, pay up to $100,000 in fines and forfeit cash and stock worth about $650,000. He pleaded guilty to money laundering.
Smith, who owned a mortgage brokerage, pleaded guilty to mortgage fraud and money laundering. His recommended sentence is up to four years and five months in prison and up to $60,000 in fines.
U.S. District Judge Patrick Schiltz, who is not bound by the recommendations, will sentence the men later.
DAVID SHAFFER
