A 49-year-old Champlin woman has admitted to participating in a mortgage fraud scheme involving at least 200 properties, principally in north Minneapolis, and mortgage proceeds of about $35 million.
Gayle D. Claus pleaded guilty in federal court in Minneapolis on Friday to conspiracy to commit mail and wire fraud.
In her plea agreement, Claus admitted that from 2004 through 2007 she prepared false loan applications to help "investors" qualify for the loans by showing inflated incomes.
She also admitted receiving $17,500 for the properties she bought herself.
The scheme's masterminds, Jonathan Helgason, 48, of Chisago City, Minn., and Thomas Balko, 40, of Rogers, were sent to prison in 2009, Helgason for eight years and Balko for seven.
Through their company, TJ Waconia, the two made north Minneapolis the epicenter of foreclosures in the state and gained $14 million in the resale of houses, prosecutors said.
The scheme was revealed when neighborhood group staff members in the Folwell and Webber-Camden areas detected mass foreclosures that left blocks lined with vacant and deteriorating houses.
In another federal fraud case, Andrew Paul Stoner, a 39-year-old contractor from Ham Lake, pleaded guilty on Monday to participating in a mortgage fraud scheme that involved seven fraudulent transactions with Truang Quang Tran and Thanh Van Ngo, owners of Invescorp. Stoner pleaded guilty to one count of conspiracy to commit wire fraud.
Stoner, owner of Sportsmen's Contracting and Nassau Builders, built seven homes for which Tran and Ngo agreed to provide buyers. In return, Stoner agreed to pay Invescorp a sum of money following each closing. In two closings, Invescorp was listed on the HUD closing documents as a recipient of loan proceeds. Invescorp received money in the form of "management fees" although it did little or no work on the properties. Invescorp also received money in the other closings although the company was not listed in the HUD documents. In all, Invescorp received more than $800,000.
For his crime, Stoner could face up to five years in prison. A sentencing hearing has not been set yet.
PAUL WALSH AND Mary Lynn Smith