Man Accused in Cloud 9 Mortgage Fraud Indicted in 2nd Scheme
A man who already faces charges in the Cloud 9 Sky Flats fraud scheme involving condos in Minnetonka was just indicted again, this time for mortgage fraud tied to condo sales in Burnsville.
Jared Mitchell Rothenberger, 43, of Minneapolis, was charged Wednesday in federal court and accused of defrauding mortgage lenders out of millions of dollars in connection with the Chateau Ridge project in Burnsville, the U.S. Attorney's Office in Minnesota said Wednesday.
Rothenberger faces 18 counts, including wire fraud, money laundering, bank fraud, and monetary transactions in criminally derived property, according to the U.S. Attorney's Office. The alleged fraud scheme took place between August 2006 and July 2007.
The indictment alleges that Rothenberger and others conspired to defraud mortgage lenders by finding straw buyers to apply for mortgage loans to buy units at Chateau Ridge. They misrepresented to the lenders the financial situation of the straw buyers-and in some instances, Rothenberger provided straw buyers with funds or down payments, the U.S. Attorney's Office said.
Rothenberger also allegedly distributed mortgage loan proceeds to the straw buyers as kickbacks and received kickbacks for himself in the form of “facilitator fees” or other bogus charges.
The indictment against him combines similar charges that he faces related to the Cloud 9 Sky Flats condo development in Minnetonka. He was charged in November in connection with that case.
The Cloud 9 case involves more than 40 units. More than $4.2 million was reportedly used to pay kickbacks and share in the proceeds of the fraud scheme.
Seven people have thus far pleaded guilty to mortgage fraud in connection with the Cloud 9 scheme and two others, including Rothenberger, face charges, according to the Star Tribune.
Rothenberger's lawyer, Paul Edlund, told the Minneapolis newspaper that he plans to “aggressively defend the case and prepare the case for trial.”
If convicted, Rothenberger faces between five and 30 years for each of the 18 counts that he faces in the Chateau Ridge fraud scheme.