St. Louis Developer Pleads Guilty to Fraud Charges

Joseph A. Baumeister of St. Louis pleaded guilty to one felony count of bank fraud in a mortgage scheme involving 16 area properties. According to court documents, between January 2007 and October 2008, Baumeister operated a scheme to defraud several mortgage lenders through his development company by using straw purchasers to buy 16 residential properties based on misrepresentations to lenders. He then took money from the closings of the properties by artificially inflating the sales price or by falsely claiming that various home improvements had been made. After the closings on these properties, Baumeister found tenants for the properties, collected rent, and made mortgage payments on occasion. Eventually, mortgage payments fell behind or were not made and the majority of these properties went into foreclosure. The funds Baumeister extracted from the closings totaled $364,523. Sentencing is scheduled for May 1.