3 Real Estate Professionals Charged in $4.2M Scheme
Three real estate professionals were charged Thursday in connection with a scheme through which they allegedly defrauded mortgage lenders out of $4.2 million, according to the U.S. Attorney's Office in Minnesota.
Sheri Lynn Delich, 45, of Apple Valley; My Dinh Lam, 30, of Minneapolis; and Ashley Elizabeth Prasil, 26, of Eden Prairie were each charged via information with one count of conspiracy to commit mortgage fraud. When a party is charged by information, rather than an indictment, it generally indicates that a plea agreement is expected. Delich was additionally charged with one count of money laundering.
Between December 2006 and December 2007, the three allegedly conspired to defraud mortgage lenders in conjunction with the marketing of the Cloud 9 Sky Flats development-a Minnetonka condo project of bankrupt St. Paul developer Jerry Trooien.
Trooien-who owns St. Paul real estate company JLT Group, Inc.-filed for Chapter 11 bankruptcy protection in October. In February, the Federal Bureau of Investigation and the Internal Revenue Service searched Trooien's St. Paul offices in an attempt to find evidence relating to an alleged fraud scheme.
Delich, Lam, and Prasil allegedly found buyers to apply for mortgage loans to purchase units in the Cloud 9 development. The loan applications exaggerated the purchase price of the units, and each buyer knowingly received a kickback of approximately 30 percent of the reported purchase price of each unit after the inflated loans were approved. The forms submitted to lenders didn't disclose the kickback payments, which were allegedly distributed to buyers through an account controlled by Delich and funded with loan proceeds.
After Delich received the inflated loan payments, she allegedly kept a percentage for herself and unnamed others and then delivered the remainder to the appropriate buyer. She didn't disclose the payments to the lenders, the Minnesota U.S. Attorney's Office said.
More than 40 Cloud 9 units were allegedly sold through the scheme, and more than 80 percent of the loans have since defaulted. More than $4.2 million was transferred to accounts believed to be controlled by Delich, who allegedly accepted a wire transfer of $120,123 in fraud proceeds.
The defendants each face a potential maximum penalty of five years in prison, with the exception of Delich, who faces a 25-year maximum. All sentences will be determined at a later date by a federal district court judge.