Third Defendant Cops Plea In Alleged $100M Minnesota Mortgage Fraud Investigation

The Minneapolis Star-Tribune reports:

• A stay-at-home mom from Ohio admitted in federal court Thursday that she let participants in an alleged mortgage fraud conspiracy use her name and credit so they could buy 46 properties in some southern Twin Cities suburbs. Melissa D. Smith, 43, admitted that between 2004 and January of this year, she misled lenders who called to check on her income, never put any of her own money down on the properties, and allowed people working with a home builder to sign her name on real estate and loan documents. On occasion, individuals working for the home builder gave Smith checks with instructions to pay down her credit card debts so she could continue to borrow money, according to her plea agreement.

• Court documents identify the home builder orchestrating the scheme only as "Company A." The Star Tribune confirmed through property records and sources that it is Parish Marketing and Development Corp. of Eagan. Investigators suspect Parish Marketing used straw buyers, including some relatives, to buy multiple homes at inflated prices. The scheme unraveled as the housing market slowed, new buyers could not be found and houses ended up in foreclosure.

Reportedly, lenders were duped into lending around $100 million in mortgages, resulting in losses estimated at around $50 million. Smith reportedly admitted to being paid $2,000 for each transaction that she participated in.

For more, see Ohio woman says she lent her name to fraud (Melissa D. Smith, the third to plead guilty in the case, admitted helping to buy $20 million in metro properties) (if link expired, try here).

Go here for other posts on home builder Parish Marketing and the ongoing investigation.