Man Pleads Guilty to Loan Fraud in Condo Development

Allison Tussey —  September 24, 2013 — Leave a comment

John Michael Stevens, 47, Lakeville, Minnesota, pleaded guilty for his role in a scheme to defraud mortgage lenders in connection with the sale of condominiums at the Chateau Ridge development in Burnsville, Minnesota.

 

The defendant, a developer of the Chateau Ridge project, pleaded guilty to one count of conspiracy to commit wire fraud. Stevens, who was indicted on November 20, 2012, entered his plea before United States District Judge Susan Richard Nelson.

In his plea agreement and in Court, Stevens admitted that in 2007, he conspired with others to defraud lenders who were financing his sale of certain units at Chateau Ridge.

In one of the sales, Stevens admitted to misrepresenting the true purpose of a payment that was to be made from mortgage loans proceeds. In that sale, he 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. The lender in that sale lost 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 20 years in federal prison. Judge 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.

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