News and Press Releases
Ellendale man sentenced for orchestrating multi-million-dollar mortgage fraud scheme
FOR IMMEDIATE RELEASE
May 11, 2012
MINNEAPOLIS – Yesterday in federal court in St. Paul, a 37-year-old Ellendale,
Minnesota, man was sentenced on charges stemming from a mortgage fraud scheme that resulted
in losses of at least $18 million for mortgage lenders. On May 10, 2012, United States District
Court Judge Paul A. Magnuson sentenced Michael Anthony Prieskorn for orchestrating the
scheme, which involved the purchase of approximately 70 residential properties in Florida and
Minnesota between December 2006 and April 2007. Prieskorn was sentenced to 72 months in
prison on one count of conspiracy to commit wire fraud and one count of engaging in an illegal
monetary transaction. Prieskorn was indicted on January 20, 2010, and pleaded guilty on March
23, 2010.
"Mortgage fraud creates so much harm to individuals, businesses, and our economy, but
today's sentencing is a strong reminder how serious our courts consider this criminal activity,"
said Kelly R. Jackson, Special Agent in Charge, IRS-Criminal Investigation, (IRS-CID), St. Paul
Field Office Field office. "IRS-CID is committed to ‘following the money trail’ to ensure that
those who engage in these illegal activities are vigorously investigated and brought to justice.”
In his plea agreement, Prieskorn admitted he and others conspired to obtain mortgage loan
proceeds by luring buyers to purchase properties. In return, Prieskorn promised the buyers
$5,000 for every property purchased. He also promised to make all mortgage payments and pay
all other bills associated with the properties for a specific term, after which, he would sell the
properties at no cost to the original buyers or “investors.” Prieskorn maintained that the
mortgage loans were risk free to their investors, knowing all the while the 20 investors were
responsible for the loans. Following the closing of these real estate transactions, many investors
defaulted on their mortgage loans and were forced into short sales or foreclosure. Yet, Prieskorn
admitted receiving at least $1 million in gross receipts as a result of the scam.
In pleading guilty, Prieskorn also admitted concealing from mortgage lenders that he
temporarily deposited funds into the bank accounts of some investors to misrepresent the true
financial status of those buyers, thereby inducing lender approval of the mortgage loans. He also
concealed from the 20 mortgage lenders that he paid the down payments and closing costs for
the investors.
In furtherance of the scheme, Prieskorn transferred money, by wire, into investors’ bank
accounts and caused the faxing of fraudulent mortgage loan applications to potential mortgage
lenders. He also caused lenders to make wire transfers of mortgage loan proceeds on related real
estate transactions. Specific to the monetary transaction count, Prieskorn structured financial
transactions to conceal that he was the recipient of funds from the fraud. Those transactions
included a $225,000 transfer on May 7, 2007.
On February 8, 2011, Judge Magnuson sentenced Prieskorn’s co-defendant Richard
Matthew Laho, age 55, of Buffalo, to five years of probation on one count of mail fraud. He was
also indicted on January 20, 2010, and pleaded guilty on July 8, 2010.
In his plea agreement, Laho admitted that in March and April of 2007, he took part in the
scheme by participating in a real estate purchase in Naples, Florida. In that transaction, the buyer
was given $5,000 for purchasing the property and falsely told that all mortgage payments and
other bills associated with the property would be paid for him. He also was told that the property
eventually would be sold as an investment. Laho admitted misleading the lender into believing,
however, that the buyer was intending to be the true owner and resident of the home. The
property eventually went into foreclosure, resulting in a loss to the mortgage lender of between
$490,000 and $690,000.
This case was the result of an investigation by the Internal Revenue Service-Criminal
Investigation Division, the Eagan Police Department, the Minnesota Department of Commerce,
the U.S. Secret Service, the Minnesota Financial Crimes Task Force, and the Minnesota Bureau
of Criminal Apprehension. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and
Robert M. Lewis.
This law enforcement action is in part sponsored by the interagency Financial Fraud
Enforcement Task Force. The task force was established to wage an aggressive, coordinated and
proactive effort to investigate and prosecute financial crimes. It includes representatives from a
broad range of federal agencies, regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful array of criminal and civil
enforcement resources. The task force is working to improve efforts across the federal executive
branch and, with state and local partners, investigate and prosecute significant financial crimes,
ensure just and effective punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover proceeds for victims of financial
crimes.
