2 Locals Charged in Multimillion-Dollar Mortgage Scams
The U.S. Attorney's office in Minnesota on Monday announced charges in two separate multimillion-dollar mortgage fraud schemes.
Derrick Ivan Lance, a 40-year-old mortgage broker from Edina, is charged with one count of conspiracy to commit wire fraud for his alleged role in a $20 million mortgage fraud scheme involving 57 properties.
Between 2004 and 2007, he allegedly conspired with others to obtain mortgage loan proceeds based on falsified documents. Lance's co-conspirators recruited buyers for residential properties; buyers were told that they'd get “kickbacks” once the deals closed, which could be applied toward the mortgages or be used to improve the properties.
Lance is accused of creating and submitting mortgage applications that misrepresented buyers' actual finances. The false documents led to loans being approved, and loan proceeds being disbursed to title companies. Lance and others then had title companies put a portion of the proceeds into accounts not associated with the buyers in an attempt to hide the kickbacks, according to the U.S. Attorney's office.
Lance allegedly received about $200,000 for helping buyers to get loans for 26 properties. He faces up to 20 years in prison, and his co-conspirator, Roger Bill Hanks of Coon Rapids, pleaded guilty last month in connection to the scheme.
Also on Friday, Lindsey Rae Loyear was charged with one count of conspiracy to commit mortgage fraud for her alleged role in a scheme to defraud lenders out of more than $5 million.
From 2006 to 2008, Loyear allegedly worked with co-conspirators to defraud lenders in local real estate transactions, including the purchase of the Cloud 9 Sky Flats development in Minnetonka-a $42 million scheme that has led to the charges of several individuals, including Sheri Lynn Delich, who told the court that she received instructions from Cloud 9's developer Jerry Trooien on how to handle the money she fraudulently received.
As a real estate agent and mortgage broker, Loyear concealed information-including the fact that she had arranged short-term loans to buyers to be used as down payments and had given cash kickbacks to buyers, according to the U.S. Attorney's office.
Through the scheme-which involved more than 130 units-more than $8 million was allegedly transferred among accounts and used to pay the kickbacks and share proceeds among those involved in the fraud. If convicted, Loyear faces a maximum sentence of five years in prison.