A Minneapolis mortgage broker was convicted last week of orchestrating a loan fraud that cost local lenders, including Anoka Hennepin Credit Union, losses of more than $4.6 million.
The broker, 31-year-old John Spencer, generated fraudulent loans which were used to recruit straw purchasers of residential real estate at inflated prices in order to fool the lenders, according to prosecutors.
The transactions generated proceeds that greatly exceeded what the sellers were ready to accept and the excess funds were shared by buyers that Spencer recruited. The defendant worked as a broker at Minnesota One Mortgage.
Spencer defrauded the Minneapolis-based Anoka Hennepin CU by borrowing more than $700,000 fraudulently to buy a home in Albertville, a deal that generated a $73,000 kickback for him, and by taking out second mortgages against two investment properties secured by phantom equity.
Sentencing has not yet been scheduled.
