A Minneapolis broker who helped borrowers tap area credit unions and banks for more than $8 million in mortgages to buy homes at inflated prices was sentenced Monday to 10-and-a-half years in prison.
John Anthony Spencer, 31, a broker at the now defunct Minnesota One Mortgage, was convicted in June of conspiracy to commit mortgage fraud, wire fraud, bank fraud, and money laundering in a scheme that caused millions of dollars in losses to U.S. Federal Credit Union and Anoka Hennepin Credit Union, among others.
“Spencer inflicted many millions of dollars in damage to commercial lenders, financial institutions, the secondary purchasers of the bad mortgage paper his activities generated (such as Fannie Mae and Freddie Mac) and to the economy of the United States generally,” Assistant U.S. Attorney David MacLaughlin said in a presentence filing.
The $8.2 million of losses cited in the report minimizes losses from a “broader swath of fraudulent conduct” that Spencer had engaged in for the past seven years, MacLaughlin wrote. It also excludes the damage to the credit scores of unwitting consumers he recruited to buy properties at inflated prices.
Minnesota One was owned by Chad Wegscheider, who recently pleaded guilty in a separate fraud scheme were home lenders were defrauded to the tune of $5 million on properties in Minnesota and Wisconsin.
The evidence in the Spencer trial showed that he had brokered fraudulent loans for people who were recruited to buy real estate in Minneapolis, St. Paul and Albertville at inflated prices. The excess was split among Spencer, the buyers he recruited, and other accomplices.
Appraiser Bryan Lenton, 32, and broker Patrick Dols, 38, pleaded guilty in March to their roles in providing bogus appraisals and arranging financing based on false mortgage applications. They face up to five years in prison and await sentencing.
