Hennepin County prosecutors have charged more than 50 individuals and companies with mortgage fraud and racketeering in cases involving 500 homes and more than $125 million in fraudulent loans, resulting from a two-year investigation.
At a press conference in north Minneapolis Thursday, County Attorney Mike Freeman announced the results of the investigation. He said mortgage fraud stemming from the housing crisis has cost individuals and banks more than $100 million over the last five years.
"While the majority of the cases targeted properties in north Minneapolis and Hennepin county, we also prosecuted cases in which the properties were located in Ramsey, Sherburne, Carver, Wright, Anoka, Dakota and Washington counties," Freeman said.
He said many of the fraudulent loan scams his office investigated involved equity stripping and the manufacture of counterfeit loan documents.
Plymouth resident Melony Michaels and her husband, John Foster, were victims of identity theft and mortgage fraud when a fraud ring took out fraudulent loans on five homes in north Minneapolis in their names. Michaels said she is relieved the perpetrators have been punished.
"We might never get a dime back, but even if we don't get a dime back, he's not out there doing that to someone else," Michaels said. "That whole gang got broken up and he's in prison and the county attorney's office can say they got the longest conviction for this kind of crime ever, and that gives them the ability to keep going after these people so it won't be as rampant as it was."
Three men were convicted of racketeering, identity theft and nine counts of theft by swindle. The ringleader in their case was sentenced to 198 months in prison and a $500,000 fine.