Real Estate Exec Gets Max Sentence For $1.2M Fraud
A closing agent who owns a local bankrupt real estate firm was sentenced Friday to more than five years in prison for misappropriating $1.2 million through real estate transactions she handled.
Cynthia Strand, 51, of Forest Lake, was sentenced to 68 months behind bars. Her sentence was handed down by Washington County District Judge Gregory G. Galler and was the maximum sentence Strand could have received for the charges to which she previously pleaded guilty-two counts of theft by swindle and three counts of theft by false representation.
Strand, who owns Strand Closing Services, was charged last summer in Washington County with theft by swindle, insurance fraud, aggravated forgery, concealing criminal proceeds, and racketeering. Some of the charges were later dropped as part of her plea agreement.
According to the Minnesota Department of Commerce, which investigated the case, Strand withheld, misappropriated, and then converted for personal use funds that came through Strand Closing Services. The money was supposed to be used to pay off mortgages on specific properties, mostly in the Twin Cities, and to cover transaction fees. Instead, Strand transferred the money to her personal accounts or to businesses controlled by her and her husband.
The department said that in addition to misappropriating funds, Strand also failed to record several title changes, failed to remit title insurance premiums, and used “fraudulent, coercive, or dishonest practices” or demonstrated “incompetence, untrustworthiness, or financial irresponsibility.”
“This type of white collar fraud strikes at the heart of the American dream-home ownership,” Washington County Attorney Pete Orput said in a statement. “Our office has intensified its efforts to vigorously prosecute white-collar crime, bringing on staff some experienced personnel in this area. In this day and age, all prosecutors' offices need to have a specialization in this area.”
The Department of Commerce began investigating Strand's business in October 2009 after receiving a complaint: An attorney who represented a bank claimed that funds given to Strand Closing Services at a 2007 closing weren't used to pay off the first mortgage on a property as was intended.
After the investigation was launched, numerous other complaints were submitted. Two transactions reviewed by the department involved the City of Forest Lake, which claimed that funds given to Strand's company at real estate closings weren't used to pay off mortgages and fees associated with the transactions.