MN Attorney Gets 2.5 Years for $2M Loan Scheme
Richard Sand, a 59-year-old man from White Bear Township, was sentenced to two-and-a-half years in prison for one count of aiding and abetting wire fraud and one count of aiding and abetting money laundering, Minnesota's U.S. Attorney's office said late last week.
Sand, an attorney, was charged in July 2010 along with two co-defendants for his alleged role in a $2 million loan fraud scheme, and he pleaded guilty in late March. A report by the Star Tribune indicates that Sand was formerly a White Bear Township board member.
Co-defendant Brenda Epperly, a 60-year-old woman from Oak Grove, was sentenced earlier this month to six months in prison for one count of aiding and abetting wire fraud. The third defendant, 50-year-old Plymouth man Donald Krause, also pleaded guilty in March, although his sentencing date has not yet been set. Krause faces up to 20 years in prison for aiding and abetting wire fraud and 10 years for money laundering.
In their plea deals, each defendant admitted to using property transactions to defraud a lending institution, the U.S. Attorney's office said.
In February 2008, RSN Corporation bought a house in Orono for $1.6 million; Krause was a general partner at RSN at that time. The day after the deal, Krause sold the home to Sand's 86-year-old mother for $2.6 million, according to the U.S. Attorney's office.
Under the terms of the transaction, Sand's mother was supposed to pay $600,000 in cash and the remainder through a $2 million loan that was approved by Bank of America. The loan proceeds were wired to Epperly-a closing agent at a title company-who allegedly gave $900,000 of the loan funds to RSN. A portion of that money was then submitted as Sand's mother's cash payment, and Epperly falsified documents provided to the lender, making it appear as though Sand's mother had a financial stake in the deal, when that wasn't actually the case.
Krause then bought a cashier's check with the loan proceeds to redeem a foreclosed property that Sand owned in St. Paul, the U.S. Attorney's office said. Sand also admitted to using an additional $170,000 in loan proceeds for his own benefit; Krause admitted to receiving about $50,000 as a result of the fraud.