3 Mortgage Fraudsters Sentenced to Long Prison Terms

Allison Tussey —  November 8, 2011 — Leave a comment

Eric Devon Bernard, the last of three major defendants convicted of racketeering in the Enzo Mortgage Group fraud case, was sentenced to 87 months in prison, meaning that all three received significant prison time, fines and even forfeitures.

Eric Devon Bernard, also known as Eric Allen Shapiro, 24, was sentenced to 87 months in prison and ordered to pay $1,000 in restitution to a man whose identity was stolen and pay a fine of $10,000.

On Oct. 7, 2011, David Schoenhofen, 43, was sentenced to 54 months in prison and was to forfeit a rental home he owned in Edina, Minnesota, to the Hennepin County Attorney’s office. The house has a value of about $250,000.

Stacy Harrold, 43, was sentenced on Sept. 27, 2011, to 75 months in prison, ordered to pay $1,000 to the same California man and pay a $10,000 fine.

All three were convicted of racketeering with underlying crimes of theft by swindle and identity theft. Bernard‘s total fraud was approximately $5 million and his personal profits from the crimes exceeded $300,000.

Bernard and Schoenhofen would identify properties to buy. Then Harrold, through her work as a loan officer at Enzo Mortgage, would create fraudulent documents and set up the sales to Bernard or to two California residents whose identities they had stolen.

At the closing, the three would share in fees, kickbacks of loan proceeds and payments to Bernard‘s Cire Builders for work that was never done on the houses. Since there were no buyers who ever intended to live in the homes, located throughout the metropolitan area, most of them went into foreclosure, causing losses for the lenders.

During Bernard‘s sentencing, assistant Hennepin County Attorney Thomas Sinas told McGunnigle that Bernard “committed one of the most serious crimes in this state,” and has shown no remorse.

“Anyone who has lived in this country the past three years know how fraud, lying, and stealing impacts individuals, families, and our whole community,” Sinas said.

When Bernard spoke, he said he has accepted his responsibility, but then went on to explain why he thought what he did with the loans was legitimate and denied, again, ever stealing anyone’s identity. McGunnigle said nothing to him, but in an earlier finding, said Bernard was “unworthy of belief.”

While Harrold told the court she was “extremely sorry for any involvement I had in this situation,” she also appeared not to grasp the impact her actions, and those of others involved in mortgage crimes around the country, had on hard-working Americans.

She told McGunnigle that she was concerned about the fine because “I haven’t been able to be employed because of this and because of the mortgage downfall,” which was making it difficult for her and her husband to sell or refinance their house.

Schoenhofen‘s sentencing included rolling in the crimes that resulted from a search of his Prior Lake house. In a safe, investigators found 70 grams of marijuana, $3,400 in cash and a handgun. Schoenhofen said the gun was for protection when he collected rents from some of his rental properties and many tenants paid in cash.

Schoenhofen, too, showed only a small amount of remorse. When his attorney described Schoenhofen‘s actions as “poor judgment,” McGunnigle would have none of it.

“This was not an accident,” McGunnigle said. “This was not an error in judgment. This was a serious crime.”

The Hennepin County Attorney’s Office, with the help of a federal grant, has aggressively prosecuted the fraud, racketeering and other white collar crimes that occurred during and immediately after the run up of housing values and the collapse of the market and resulting foreclosures. The office has brought more than 50 mortgage fraud cases involving 70 people and companies.

Michael Hudalla, co-owner of Enzo Mortgage, will go on trial Nov. 28, 2011. That will be the final case in this investigation.

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Allison Tussey

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