Former MN Mortgage Firm Exec. Accused of $8M Fraud
Joseph Traxler, a former executive of Centennial Mortgage and Funding, Inc., was charged Wednesday in Minneapolis federal court with defrauding a bank of approximately $8 million, Minnesota's U.S. attorney's office announced.
Traxler-a 63-year-old Bloomington resident-was senior vice president and chief financial officer of the now-defunct Bloomington-based company when he allegedly used funds intended for mortgage loans to cover Centennial's operating losses and to fund its payroll and other expenses. He is charged with one count of aiding and abetting bank fraud.
From 2007 to 2008, Traxler allegedly misrepresented the status of mortgage loans to get banks to advance Centennial more money, concealed loan defaults from banks, hid the fact that he obtained double-funding on 23 mortgage loans, and wrote checks between Centennial's various bank accounts.
If convicted, Traxler faces a potential maximum penalty of 30 years in prison.
Traxler wasn't acting alone in the scheme, according to the Star Tribune. The charging document reportedly alleges that Traxler was aided by others.
According to the Pioneer Press, the Minnesota Department of Commerce shut down Centennial in 2008 after finding problems with its lines of credit. The company allegedly was funding home loans using its lines of credit with banks while waiting for someone to purchase the mortgages.