MN Revokes Missing Originator's License

The Minnesota Department of Commerce has revoked Michael Prieskorn's mortgage originator license and fined him $2.2 million for his involvement in the allegedly fraudulent sale of homes in high-growth areas including Eagan, Buffalo, Rochester and St. Cloud. The department charges that Mr. Prieskorn participated in a "builder bailout" scheme where he persuaded investors to purchase 220 homes at substantially inflated prices, allowing the sellers to make profits and Mr. Prieskorn to collect "management fees" ranging from $22,000 to $105,000. Instead of keeping up on the mortgage and utility payments, the department charges that Mr. Prieskorn spent the money himself. In April 2007, Mr. Prieskorn allegedly emptied his bank accounts, stopped making payments and failed to purchase any of the investors' homes as promised. Most of the homes have fallen into foreclosure. Mr. Prieskorn has been at large since he failed to appear at an administrative hearing on the matter in December 2008 and could not be reached for comment. Bill Walsh, a spokesman for the department, said this "looks like criminal activity" and the department has often seen cases like this result in criminal investigations. But he said he was not aware of any criminal investigation into the activity and referred questions as to whether there was one to the U.S. attorney's office. A spokesman for the U.S. attorney's office said he could neither confirm nor deny the existence of a criminal investigation into the matter.