Local Real Estate Agent Gets 8.5 Yrs. For $43M Fraud
A local real estate agent was sentenced on Thursday to eight-and-a-half years in prison for his alleged role in a $43 million mortgage scheme that involved more than 100 Twin Cities residential property deals, Minnesota's U.S. attorney's office announced.
Troy David Chaika-a 45-year-old Burnsville resident-was found guilty in May of seven counts of wire fraud, three counts of mail fraud, and one count of conspiracy to commit wire and mail fraud.
Between 2005 and 2008, Chaika conspired with Prior Lake resident Dustin Lee LaFavre and others to fraudulently obtain money through more than 100 residential property transactions, according to the attorney's office.
Chaika, LaFavre, and other co-conspirators allegedly negotiated with builders and property owners to buy properties in bulk at discounted prices. They then solicited buyers, quoting them inflated prices while offering them kickbacks or large cash payouts.
Once they found a buyer for a property, the conspirators would draft a purchase agreement that reflected the inflated sale price and that did not disclose to lenders the kickback amounts. By charging the buyers inflated prices, the conspirators acquired enough cash from loan proceeds to pay the buyers their kickbacks and still have money left for themselves.
In some cases, Chaika, LaFavre, and others involved in the scheme worked with buyers and mortgage loan officers to prepare false documents to use in the mortgage applications. They also lent some buyers money to use for down payments or to pad their bank balances to help them qualify for larger mortgages without disclosing those payments to the lenders.
LaFavre-who pleaded guilty in December 2009-was sentenced in September to four years in prison on one count of conspiracy.