White Bear Lake Man Gets 3 Yrs. for $7M Mortgage Fraud

White Bear Lake Man Gets 3 Yrs. for $7M Mortgage Fraud

Former real estate agent Robert Leo Rick received a three-year sentence for a scheme that involved 102 residential properties and defrauded mortgage lenders out of at least $7 million.

Robert Leo Rick, a 52-year-old White Bear Lake resident and former real estate agent, was sentenced on Wednesday to three years in prison for a $7 million mortgage fraud scheme involving 102 residential properties, according to the U.S. Attorney’s Office in Minnesota. His sentence was handed down by U.S. District Court Judge Susan Richard Nelson.
 
Rick was indicted in December 2011 and pleaded guilty in January 2012 to one count of conspiracy to commit mail and wire fraud.
 
In the plea agreement, Rick admitted that between 2005 and 2007, while employed with Rick’s Realty, he assisted builders and developers in securing investors to purchase multiple residential properties, according to the U.S. Attorney’s Office. The investors then received undisclosed kickbacks from mortgage loan proceeds.
 
To generate funds for the kickbacks, the builders and developers sold the properties at reduced prices; meanwhile, appraisers valued the homes at inflated prices and mortgage lenders approved mortgage loans based on those inflated prices. The difference between the true, reduced prices and the inflated prices was given to investors in the form of kickbacks, according to the U.S. Attorney’s Office, which said that Rick was aware of the scheme taking place.
 
Through the scheme, Rick assisted builders and developers, including the former Roseville-based real estate company TJ Waconia, in selling 102 residential properties with mortgage loans totaling roughly $26 million. Rick also acted as property purchaser, either directly or by using his then-wife’s name, for at least eight of the properties and received approximately $397,000 in purchaser kickbacks, according to the U.S. Attorney’s Office.
 
Rick also admitted to using U.S. mail, interstate wire communication, and commercial carrier services to deliver information to investors.