A Webster, Minn., man pled guilty in federal court Monday to bilking more than $7 million from at least 15 real estate companies.
Dustin LaFavre, 27, pled guilty to one count of conspiracy to commit mail and wire fraud in connection with the scheme.
In his plea agreement, LaFavre admitted conspiring with a licensed real estate broker to defraud mortgage lenders from 2005 to 2008. The pair sold at least 172 properties, inflating the property sale prices and then reporting the false amounts to lenders, LaFavre said.
LaFavre said he and his partner, who has not been identified, divided the profits from the difference between the inflated sales prices and the true prices among themselves and the buyers.
Jeanne Cooney, spokeswoman for the U.S. Attorney's Office, said she cannot confirm or deny whether authorities are investigating the partner's role, or whether the partner will be charged.
LaFavre also admitted that he helped buyers qualify for mortgage loans by creating false verifications of employment, depositing money into their bank accounts to inflate their balances, providing them with down payments, and working with mortgage brokers and loan officers who prepared false documentation to give to lenders.
He faces a maximum penalty of 20 years in prison. His sentencing date has not yet been announced.