Former Mortgage Firm Exec. Pleads Guilty to $8M Fraud
Joseph Traxler, a former executive of Centennial Mortgage and Funding, Inc., on Thursday pleaded guilty to defrauding a bank of approximately $8 million, Minnesota's U.S. attorney's office announced.
Traxler, a 63-year-old Bloomington resident who was senior vice president and chief financial officer of the now-defunct Bloomington-based company, pleaded guilty to one count of aiding and abetting bank fraud. He was charged in September.
In his plea agreement, Traxler admitted that from 2007 to 2008, he used funds intended for mortgage loans to cover Centennial's operating losses and to fund its payroll and other expenses. He also 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.
Traxler admitted that he wasn't acting alone in the scheme and that he was aided by others, according to the attorney's office. He faces a maximum penalty of 30 years in prison.
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.