Minneapolis-Area Straw Buyer Operation Involving At Least 220 Homes The Subject Of FBI Probe; May Be Largest Scheme In State History

In Eagan, Minnesota, the St. Paul Pioneer Press reports on a straw buyer operation allegedly run by 33-year-old Michael Prieskorn:

• The former Plymouth resident and his companies remain the subject of a federal investigation, according to [Eagan police Detective Rich] Evans and several buyers. If allegations prove true, it would be the largest mortgage fraud scheme to surface in Minnesota.

• Prieskorn allegedly arranged the sales of at least 220 new homes, but Evans suspects the total is closer to 340 or more and could involve as many as 90 local buyers, according to [a search warrant] affidavit, which is partially based on business records and a spreadsheet Prieskorn's employees turned over to Evans. Prieskorn may have grossed as much as $20 million from the hefty fees he took, the affidavit says, though some of that may have been spent paying mortgages.

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• The case now is in the hands of the FBI and the Internal Revenue Service, according to Evans, but it's unclear whether they are actively looking for Prieskorn or whether any of his circle of industry contacts are part of the probe. No charges have been filed. No investor-buyers appear to have sued, although lenders have named Prieskorn in three open foreclosure cases in Collier County, Fla.

For more, see Mortgage scam snagged scores (Company left trail of foreclosures from Twin Cities to Florida).

For a Pioneer Press editorial on the subject of this story, see Foreclosures Get square, beware.