Nov 3, 2007 5:29 pm US/Central
Developers Plead Guilty In MN Mortgage Fraud Case
MINNEAPOLIS (AP) ―
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On Friday, Michael Parish and Troup pleaded guilty to felony counts of money laundering and conspiracy to commit mortgage fraud.
A longtime home builder, his wife and son-in-law have pleaded guilty for their roles in a mortgage fraud scheme that bilked lenders and others out of an estimated $50 million involving nearly 200 homes.
Michael Parish, of Eagan, and his wife, Ardith, were charged in October along with their company, Parish Marketing and Development Corp., and son-in-law Christopher Troup.
On Friday, Michael Parish and Troup pleaded guilty to felony counts of money laundering and conspiracy to commit mortgage fraud. Ardith, 61, pleaded guilty to a minor role in the scam by serving as the company's bookkeeper.
Michael Parish set up the operation, which profited on homes built in Lonsdale, New Prague and New Market in recent years. Along with his co-conspirators, Parish used straw buyers to obtain at least $100 million in loans, then used that money to build more homes, make mortgage payments on some of them and keep the scam going.
The company made at least $25 million on those loans, but the downturn in the local housing market ultimately brought the scheme crashing down. More and more of the homes slipped into foreclosure, and prosecutors estimate the losses at $50 million.
The defendants call that number an exaggeration, but a judge will ultimately use the amount of losses and number of victims to determine the sentence for each person.
Michael Parish could face between 11 and 14 years in prison, Ardith is looking at a maximum of five years and Troup, who was the straw buyer on 60 properties in addition to bringing other buyers into the mix and falsifying documents to inflate appraisals and bring in more loan money, is estimated to get 9 1/2 to 11 years.
The three guilty pleas are the latest in a swift prosecution of the case. Five others had previously pleaded guilty to some involvement in the conspiracy and Assistant U.S. Attorney Joe Dixon wouldn't rule out more charges.
"The dust hasn't completely settled," Dixon told U.S. District Judge Ann Montgomery.
Along with jail time, the Parishes and Troup will have to pay some form of restitution to the victims.
Attorneys for both sides asked Montgomery to appoint a receiver for the properties so they can be sold and some renters can remain living in them.
Montgomery did not make an immediate ruling, but said her biggest concern is keeping enough money freed up to be returned to the victims.
"Certainly it's the court's intent to maximize the amount of restitution that could be paid to victims," she said.
Peter Wold, the attorney for Michael Parish, has said previously that there isn't a lot of money left. Wold said the money from the alleged scheme went to pay subcontractors and other bills in an effort to stave off financial collapse.
"You can do all the investigation you want, but you're going to find very little largesse on the parts of Mike and Ardy Parish," he said. "You're not going to see these people with million-dollar vacation homes around the country and overseas, and things like that."
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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