Former Maplewood Brokerage Owner Charged with Fraud

Chad Wegscheider reportedly is accused of conspiring to commit mortgage fraud related to the conversion of apartment buildings into condominiums.

Chad Wegscheider, the former owner of a mortgage brokerage firm in Maplewood, was charged on Monday with conspiracy to commit mortgage fraud, according to a report by the Star Tribune.

Prosecutors allege that between 2006 and 2008, Wegscheider and an unnamed accomplice conspired in a scheme to enter into purchase agreements for apartment buildings that were to be converted into condominiums. The buildings were located in Minnesota and Wisconsin.

Wegscheider is accused of recruiting buyers to purchase the condos at an inflated price and then tricking mortgage companies into lending money to those unqualified borrowers, the Star Tribune reported.

A federal lawsuit in 2008 named James and Teresa Hoffman of Hastings as leaders in the alleged scheme, although they haven't been charged. The scheme allegedly involved a pool of funds used to pay for the buildings and resulted in more than $5 million in “excess funds.”

The Minneapolis newspaper reported that Wegscheider, a 37-year-old man formerly of White Bear Lake, was charged by way of information rather than by an indictment, which often implies that a plea deal is expected.

To learn more about the allegations against the Hoffmans and Wegscheider, read the full Star Tribune story here.