A Bloomington accountant has been charged with defrauding a bank of $8 million.
Joseph Traxler, 63, was the senior vice president and chief financial officer of Centennial Mortgage and Funding, Inc. when he allegedly funneled money from clients' mortgage loans into his company's coffers.
The Minnesota U.S. attorney's office claims Traxler used the money to cover Centennial's operating losses and payroll from 2007 through 2008. Traxler also allegedly lied about the status of mortgage loans, and convinced banks to put additional money in lines of credit.
"This is another example of how fraud was perpetrated in the housing markets," said Jeanne Cooney, a spokesperson for the U.S. Attorney's Office. Many such fraud cases have yet to be charged or tried however, she added, and others can take years to prosecute because of the volume of documents involved.
News of Traxler's prosecution comes at the same time that the U.S. Attorney's Office announced the sentencing of Dustin LaFavre, to 48 months in federal prison on one count of conspiracy to commit mail and wire fraud.
LaFavre, 28, of Webster, bilked 15 real mortgage lending firms of more than $7 million.
He admitted in a plea agreement to acting as a broker between 2005 and 2008 for developers seeking to sell homes. LaFavre found straw buyers, falsified documents so banks approved mortgages that valued the properties at a much higher cost, and mailed the false documents using both the U.S. Postal Service and commercial carriers.
Once the papers were signed, LaFavre and the straw buyers split the difference of the mortgage and the actual price of the home.
Cooney says 172 Minnesota homes were involved.