Prieskorn and Laho-under the business names Blackstone Sales and Maine Estates

Two indicted for mortgage fraud in Minnesota, Florida | StarTribune.com:

'via Blog this'A federal indictment following the arrest of a Minnesota man in Florida details a complex mortgage fraud scheme that allegedly funneled more than $5 million to him in just five months.

According to the grand jury indictment released Tuesday, Michael Anthony Prieskorn, 35, of Ellendale, received money from investors to buy about 70 residential properties in Florida and Minnesota between December 2006 and April 2007. He did so with help from Richard Laho, 54, of Buffalo.

Prieskorn and Laho were each charged with 23 counts of wire fraud, one count of mail fraud and one count of conspiracy to commit wire fraud. In 2006, the indictment alleges, Prieskorn -- under the business names Blackstone Sales and Maine Estates -- negotiated with builders to buy a number of residential properties at discounted prices. Laho, a mortgage broker, solicited investors to buy some of the properties by allegedly promising that the deals were risk free, the indictment says.

They also promised each investor $5,000 for every property purchased in the investor's name, according to the indictment. Blackstone or Maine Estates would make the monthly mortgage payments and cover other expenses until re-selling the properties.

To help investors qualify for the mortgages, Prieskorn and Laho allegedly deposited money into investors' accounts without the knowledge of the mortgage lenders. In return, Prieskorn and Laho received "management fees" ranging from $18,000 to $228,000 per property. They received more than $5 million in such fraudulent fees, according to the indictment.

Investigators say the scheme unraveled when Prieskorn and Laho failed to make mortgage payments as promised and properties started falling into foreclosure.