News and Press Releases

News and Press Releases

Mortgage loan officers indicted for $1.8 million mortgage fraud

April 27, 2012

MINNEAPOLIS—A federal indictment unsealed yesterday charges two mortgage loan
officers with recruiting straw buyers to purchase properties at inflated prices and then
distributing the excess loan funds among the buyers and between themselves in the form of
“kickbacks.” The indictment, which was filed on April 3, 2012, charges Troy Allen Huston, age
42, and Chad Arthur Anderson, age 38, both of Chisago City, with one count of conspiracy to
commit mortgage fraud and eight counts of mortgage fraud through interstate wire. The
indictment was unsealed following the defendants’ initial appearance in federal court.

The estimated loss to mortgage lenders because of the defendants’ alleged wrongdoing
exceeded $1.8 million. Fraudulent real estate transactions purportedly involved properties in
Otsego, Oak Grove, Elk River, St. Francis, Brooklyn Park, Isanti, St. Paul, Chisago City,
Becker, Cambridge, Buffalo, Minneapolis, Zimmerman, and Albertville.

The indictment alleges that from 2006 through 2007, the defendants, who worked as loan
officers at Prestige Mortgage, a mortgage brokerage business in White Bear Lake, recruited
mainly friends and acquaintances to act as straw buyers in the purchase of several homes in the
Twin Cities. The defendants allegedly brokered the fraudulent mortgage loans by knowingly
preparing and submitting false loan applications to lenders. In addition, while acting as
signatories for Lofton Property Management, a property management business located in
Chisago City, the defendants allegedly received illicit funds from the transaction closings that
involved the fraudulently acquired real estate. During that time, Huston was also a signatory for YES Financial, a property finance business located in Chisago City, and in that capacity, he
allegedly received loan funds, which he signed over in part to himself and others.

If convicted, the defendants face a potential maximum penalty of 20 years on each count of
mortgage fraud through interstate wire count and five years for conspiracy to commit mortgage
fraud. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the Federal Bureau of Investigation. It is being
prosecuted by Assistant United States Attorney David J. MacLaughlin.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

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