Minnesota Closing Agent Gets 24 Months For Preparing Phony Closing Docs In 60+ Real Estate Deals

(original post 1-10-08; revised 1-11-08)
In Minnesota, the Prior Lake American reports:

• Jill Lehn of Prior Lake was sentenced to 24 months in prison in Federal Court on Thursday afternoon, according to an IRS Criminal Investigation spokesperson. Lehn, a former mortgage loan closing agent and real-estate purchaser, pleaded guilty to federal fraud charges relating to a mortgage pay-out scheme on Dec. 20. Lehn pleaded guilty to one count of wire fraud and one count of money laundering before U.S. District judge Michael J. Davis. Court documents prepared between December 2004 and August 2006 state that Lehn prepared fraudulent closing documents relating to over 60 real-estate transactions.

For more, see Lehn sentenced to serve two years in prison for role in LHS mortgage-fraud case.

See also, the Minneapolis Star Tribune: Two more people convicted of a fraud scheme run through LHS Mortgage in Burnsville were sentenced this week in a St. Paul federal court - Also reports that another member of the scheme, Isadore Stewart, 40, of Stillwater, was sentenced Wednesday to 18 months in prison and three years of supervised release.

For a four page article by Jill Lehn in which she urges others in the real estate business not to make the same mistakes she made, see Tips On How To Ruin Your Life, by Jill Lehn.

Go here for earlier posts related to Jill Lehn and this mortgage fraud case.

More On Minnesota "Cash Back" Fraud Investigation

This post follows up on the Minnesota mortgage fraud investigation referenced in my Tuesday post, Feds Probing "Cash Back" Scam Involving Over 60 Deals, involving closing agent Jill Lehn.

Reportedly, Ms. Lehn has written a four page article for the upcoming March issue of Minnesota Realtor magazine which details her misdeeds while working as a closing agent at First Advantage Title Company.

Lehn and co-defendant Isadore Stewart, a Bloomington real estate investor who has also pleaded guilty to one count of wire fraud in relation to three properties he purchased at inflated prices, are continuing their cooperation with the Internal Revenue Service in an ongoing investigation expected to net more arrests.

For more, see:

the St. Paul Pioneer Press report (at twincities.com)

Mortgage fraud's 'very hard lesson' (Jill Lehn pleaded guilty and lost her real estate license. Now she's sharing her story in a magazine article) (no longer available online).

and the Star Tribune story (at StarTribune.com)

Anatomy of a real estate fraud (A simple favor plus $3 million in fraud add up to regrets - and a pending prison sentence - for a former metro-area mortgage closer) (no longer available online).

Straw Buyer/"Cash Back" Mortgage Fraud Suspect Survives Suicide Attempt; Gets 5 Years In Federal Pen

In Minneapolis, Minnesota, the Pioneer Press reports:

• The co-owner of LHS Mortgage Inc., the defunct Burnsville brokerage at the heart of a major Twin Cities mortgage fraud scheme, was sentenced Thursday to five years in prison. Ronald Joseph, 49, of Prior Lake, is the fourth and last person to be sentenced in connection with a large fraud operation involving straw homebuyers, sham loan documents with inflated sale prices and kickback payouts to various players. [...] The LHS scandal gained wider attention last year when a closing agent, Jill Lehn, 40, also of Prior Lake, was arrested and then wrote an article entitled "Tips On How To Ruin Your Life" as a cautionary tale. Lehn and two other defendants in the LHS Mortgage scheme already have been sentenced.

• In court Thursday, Joseph discussed his recent suicide attempt with U.S. District Court Judge Donovan Frank. According to his attorney, Joseph Friedberg, his client was so despondent over his actions that he drank antifreeze while out on bail about a month ago so that his wife and children could collect on a $1 million life insurance policy. Friedberg said he intervened.

For more, see Mortgage scheme leads to jail (LHS co-owner Joseph gets 5 years for homebuying fraud operation).

See also:

• Minneapolis Star Tribune: Credit River Township man sentenced in fraud scheme (He and three others obtained millions in fraudulent loans. For his part, Ronald Joseph was sentenced to 63 months in prison, the minimum recommended),
• Shakopee News: Owner of LHS Mortgage Inc., sentenced.

For earlier posts on this story, go here , and go here.

Another Minnesota Title Closer Charged In Mortgage Fraud

A continuing federal investigation has resulted in charges against Prior Lake mortgage broker Ronald Joseph, who was indicted this week in Minneapolis Federal Court. He is charged with two counts of mail fraud, one count of wire fraud and one count of money laundering. He is accused of devising a scheme to conceal $2.5 million in payments to himself, real estate buyers and other individuals through approximately 40 transactions, using fraudulent loan applications and settlement statements. The documents reflected inflated sale prices for the properties so that Joseph and others could pocket the difference.

Convicted mortgage closing agent Jill Lehn, also of Prior Lake, closed mortgages for both Joseph and another loan officer, Mario Lewis. Lewis, who received nearly $400,000, recently pleaded guilty to charges of wire fraud and money laundering.

To read more, see Prior Lake broker indicted in fake mortgage deals, reported by the Star Tribune.

See also Two more indicted in mortgage probe (Both suspects worked at LHS in Burnsville) in the Pioneer Press at twincities.com.

(articles no longer available online).

For story update (12/28/07), see Lender gets prison time (First in LHS case took plea) ("The first of four defendants tied to the LHS Mortgage Inc. fraud scandal was sentenced Friday to 4½ years in prison. Mario Lewis, 37, a loan officer at the LHS office in Burnsville, had pleaded guilty to drug charges, wire fraud and money laundering. Judge John Tunheim also ordered Lewis on Friday to pay restitution of $437,000. Lewis pocketed almost that much money from nine properties he bought in the Twin Cities area between 2004 and 2006.").

Twin Cities Loan Officer Gets 4+ Years In Cash Back Scam; Indoor Pot Farm Bust Smoked Out Bogus Mortgage Deals

In Minneapolis, Minnesota, the Pioneer Press reports:

• The first of four defendants tied to the LHS Mortgage Inc. fraud scandal was sentenced Friday to 4½ years in prison. Mario Lewis, 37, a loan officer at the LHS office in Burnsville, had pleaded guilty to drug charges, wire fraud and money laundering. Judge John Tunheim also ordered Lewis on Friday to pay restitution of $437,000. Lewis pocketed almost that much money from nine properties he bought in the Twin Cities area between 2004 and 2006. [...] Most of the homes Lewis bought are in various stages of foreclosure. That has delayed the identification of actual losses so far, but there will be lenders who suffer consequences from LHS' actions, [Federal prosecutor Joseph] Dixon said.

***

• The LHS case involved about 40 separate real estate transactions and is one of the largest mortgage fraud operations uncovered recently as the Twin Cities' real estate market soured. The LHS case had its roots in the bust of a large marijuana-growing operation found in a rental property in 2006, which involved Lewis. When investigators looked into Lewis' finances they found the questionable mortgage transactions.

For more, see Lender gets prison time (First in LHS case took plea).

See also, Minneapolis Star Tribune: Pot grower given 4½ years in prison on charges related to mortgage fraud (Reports that another defendant in this case, Ronald Joseph, who has also pleaded guilty and is awaiting sentencing, reportedly was hospitalized Thursday after ingesting antifreeze; the hospital reportedly refused to discuss Joseph's condition. Mortgage closing agent Jill Lehn, 40, of Prior Lake, has also pleaded guilty and awaits sentencing.). pot grow ops alpha

Feds Probing "Cash Back" Scam Involving Over 60 Deals

Federal investigators in Minnesota are reviewing more than 60 real estate transactions handled by one former closing agent who, authorities say, prepared loan documents that overstated the purchase price of the properties, hid the overpayments from lenders, and allowed buyers to pocket the difference between the actual price paid and the inflated mortgage amounts (adding up to over $3 million).

The closing agent, Jill Lehn, who was the buyer in a half dozen of the transactions, will forego a criminal trial and instead, has pleaded guilty to one count of wire fraud and one count of money laundering in Minneapolis Federal Court. She is currently cooperating with investigators as the investigation continues while she awaits sentencing.

To read more, see the Star Tribune story, reported at StarTribune.com:

Mortgage scam nets $3 million
(A former Prior Lake closing agent has been charged in an investigation of 60 transactions with inflated purchase prices
.