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Defendant Admits to Role in Scheme to Defraud Mortgage Lenders
MINNEAPOLIS—In a shocking turn of events, 47-year-old John Michael Stevens, a Lakeville man, has pleaded guilty to his role in a scheme to defraud mortgage lenders in connection with the sale of condominiums at the Chateau Ridge development in Burnsville.
According to court documents, Stevens, the developer of the Chateau Ridge project, conspired with others to defraud lenders who were financing his sale of certain units at the development. In his plea agreement and in court today, Stevens admitted to misrepresenting the true purpose of a payment that was to be made from mortgage loans proceeds.
In one of the sales, Stevens directed the loan closer to state in closing documents that a payment from loan proceeds was to satisfy a pre-existing mortgage on the property, even though he knew that was not the case. The loan was ultimately approved, resulting in the lender losing an estimated $227,712 when the unit went to foreclosure.
Stevens also admitted that he arranged for the buyers of four other units to be repaid their earnest money down-payments and closing costs. In effect, the buyers purchased the units for an actual price lower than what was disclosed to the lenders. The total amount refunded to the buyers of these four units was approximately $240,500.
For his crime, Stevens faces a potential maximum penalty of five years in federal prison. Judge Susan Richard Nelson will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Robert M. Lewis and Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.
A reminder: protecting yourself from mortgage fraud is crucial. Be cautious and informed when dealing with mortgage lenders.
Key Facts
- State: Minnesota
- Category: White Collar Crime
- Source: DOJ Press Release ↗
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