Mortgage Fraudster Admits Racketeering Charge

Allison Tussey —  January 9, 2012 — 1 Comment

James Darrell Ober, 43, of Hudson, Wisconsin, pleaded guilty in Hennepin County District Court, Minnesota, to one count of racketeering in connection with a mortgage fraud scheme that involved dozens of properties and millions of dollars in Federal Housing Administration-insured mortgages.

 

However, during testimony where he was questioned about the details of the scheme, Ober would admit only to certain elements of his conduct while denying knowledge of others. Ober entered a straight plea, meaning there was no negotiation for a lighter sentence and, in fact, prosecutors said they would seek an upward departure from the sentencing guidelines.

“Are you pleading because you are guilty of the crime of racketeering?” his lawyer Tom Kelly asked.

“Yes, I am,” Ober responded.

The court hearing was stopped after nearly an hour-and-a-half because of scheduling conflicts, and will resume January 20, 2012. By then, Hennepin County District Court Judge Joseph Klein should rule on arguments made last month on whether text messages between Ober and his wife and co-defendant, Wendy Ober, can be used by the prosecution.

Assistant Hennepin County Attorney Tom Sinas told Klein that there is a dispute over whether “Mr. Ober committed identity theft,” as part of the racketeering and the text messages are necessary to prove that charge.

Ober read a prepared statement in which he admitted that in the mortgages of three properties, he committed theft by swindle by misrepresenting the employment, the education and the gift funds available to the mortgage seekers. In all three cases, the misrepresentations were made to Franklin American Mortgage Corp. He conceded that these three were just some of the frauds.

Sinas walked Ober through the specifics of one of the crimes. Dressed in a dark suit, blue shirt and green-patterned tie, Ober answered in a strong, clear voice. In 2009, Ober set his sights on 1811 Upton Ave. N., Minneapolis, Minnesota, which was owned by Andrea Glembin but was in foreclosure.

Ober knew that under Minnesota law, a homeowner could stay in his or her home, if they paid the amount bid at the sheriff’s sale. In this case,  “$33,893 is the amount Andrea Glembin could have paid and stayed in her home?,” Sinas asked Ober. “That is correct,” he answered.

Instead, Ober got Sebiha Hodzic to apply for a mortgage of $122,735 from Franklin American for the property. Ober, through his Mortgage Planner’s, Inc., prepared all of the documents, which he admitted included a false transcript indicating that Hodzic was attending Minnesota School of Business and false documents, including paystubs, indicating she worked at the non-existent Heartland Paving Co.

As part of the scheme, investigators had recovered a cell phone. On the back was a paper with the name of fictitious businesses and the phone numbers associated with them so anyone answering the phone could pretend to be with the corresponding company.

Heartland Paving was just a phone number?” Sinas asked.

“I had nothing to do in setting that phone number up,” Ober said.

“But you knew it was set up to make the mortgager think she had a job?” Sinas asked.

“Yes.”

Before the closing on the loan to Hodzic, another of the companies Ober was associated with, Eagle River Financial, took out a second mortgage on the Upton Avenue property. Once Hodzic closed on the mortgage, Eagle River was paid $108,967 to pay off the second mortgage and Ober made another $5,606 on closing costs.

Ober never intended for Hodzic to live in the house, he said, and in fact, he turned it into a rental unit, which was another part of the fraud.

Also charged with racketeering in the scheme with the Obers were Raul Burgos Pliego and Alejandro Sanchez. The charges were filed in June 2011 and were the result of a joint investigation between the Minnesota Department of Commerce and the U.S. Department of Housing and Urban Development.

At the time, Hennepin County Attorney Mike Freeman said the case could signal, “the second wave of criminal activity resulting from the housing crisis.”  Friday’s guilty plea “is a very good outcome in this multi-million dollar scam and it shows again that we always stand ready to prosecute white-collar criminals who are taking money from private businesses and the taxpayers.”

Be Sociable, Share!

Allison Tussey

Posts Google+

One response to Mortgage Fraudster Admits Racketeering Charge

  1. Leave it to a Mormon … and a Mormon Bishops daughter and husband.

Leave a Reply

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong> 

*