Brooklyn Park Man Guilty in $5.1M Mortgage Fraud
A Brooklyn Park man was found guilty on Friday of racketeering for his role in a $5.1 million mortgage fraud scheme that took place in 2006.
Eric Devon Bernard-who legally changed his name to Eric Allen Shirpiro-was the last of three defendants to be found guilty in connection with the fraud scheme, according to the Hennepin County Attorney's Office, which prosecuted Bernard.
Through the scheme, Bernard and the two other defendants, Stacey Anne Harrold of Burnsville and David Arthur Schoenhofen of Prior Lake, worked together to fraudulently obtain loan proceeds in connection with the sale of seven residential properties in the Twin Cities metro area.
According to court documents, Schoenhofen-who was president of residential mortgage originator LHS Mortgage, Inc.-would either identify properties to buy or have already purchased them through one of his companies. Then Harrold, who worked as a loan officer at Enzo Mortgage Group, would create fraudulent documents and set up the property sales.
Bernard submitted falsified applications in his own name to lenders in order to obtain loans for four properties. And the three defendants together stole the identity of a California resident in order to arrange for mortgage loan financing in that person's name for three additional properties, court documents indicate.
In all cases, the defendants received fees, loan proceed kickbacks, and other illicit payments, according to court documents. They used a variety of tactics to direct loan proceeds back to themselves unbeknownst to the lenders. For example, Bernard created sham entities that he called “Cire Builders” or “Cire Building” (“Cire” is Bernard's first name spelled backward). Some loan proceeds purporting to be for property improvements or repairs were directed to those entities.
Five of the seven homes involved in the scheme have gone into foreclosure, according to the Hennepin County Attorney's Office.
Bernard himself pocketed $308,000 in illicit payments during a six-month period during which the fraud scheme took place, according to a Hennepin County Attorney's Office spokesman.
In Bernard's trial, which concluded on August 5, his lawyer argued that he was “an innocent dupe” in the scheme, the Hennepin County Attorney's Office said.
Bernard, Schoenhofen, and Harrold are all scheduled to be sentenced in late September.