Minnesota Mortgage Broker Gets 24 Months In $800K+ Real Estate Escrow Ripoff

From the Office of the U.S. Attorney (St. Paul, Minnesota):

• A 41-year-old Brooklyn Center mortgage broker was sentenced today in federal court for using for personal benefit money deposited on behalf of clients into the escrow account at his mortgage title company. In St. Paul, United States District Court Judge Richard H. Kyle sentenced Terry Louis Lemke to 24 months in prison on one count of wire fraud and one count of money laundering in connection to this crime. Lemke was charged via an Information on August 3, 2009, and pled guilty on August 14, 2009.

• In his plea agreement, Lemke admitted defrauding clients from June 2006 through 2007 by falsely representing to them that the funds they provided him as owner of All Metro Title, a mortgage brokerage company, were being held for their real estate transactions. Instead, Lemke was using that money for personal benefit. In total, Lemke defrauded clients of more than $800,000.(1)

For the U.S. Attorney press release, see Brooklyn Center mortgage broker sentenced on charges related to mortgage fraud.

(1) To the extent Lemke may have held a state license as a closing agent, the Minnesota Department of Commerce's Real Estate Education, Research and Recovery Fund could potentially find itself on the hook for some or all of the monetary losses suffered by any victims of the swindle. According to their website:

• The purpose of the Real Estate Education, Research and Recovery Fund is to compensate any person who has lost money due to a licensed real estate broker, salesperson, or closing agent’s fraudulent, deceptive or dishonest practices, or conversion of trust funds. The improper action that was committed must be an activity that required a license. [...] Applicants may be awarded any amount from $0 to $150,000, [...].