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Justice News

Department of Justice
U.S. Attorney’s Office
District of Minnesota

Thursday, October 25, 2018

Twin Cities Construction Company Owner Sentenced To 49 Months In Prison For Defrauding Investors Out Of $880,000

United States Attorney Erica H. MacDonald announced the sentencing of JESSE WELLS HAUG, 33, to 49 months in prison for defrauding real estate investors out of $880,000. HAUG, who pleaded guilty on June 4, 2018, to one count of wire fraud, was sentenced yesterday before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota.

According to the defendant’s guilty plea and documents filed in court, HAUG is the owner of a Twin Cities-based construction company called 7-10 Services, LLC. Beginning in 2015 and continuing through the end of 2016, HAUG executed a scheme to defraud investors by falsely representing to them that he would use their money to purchase and renovate residential real estate, and, in exchange, he would share the profits when the properties were re-sold, or “flipped.”

According to the defendant’s guilty plea and documents filed in court, during the course of the scheme, HAUG obtained $880,000 from two victim-investors to purchase and renovate residential properties located throughout the Twin Cities. During the course of HAUG’S interactions with the victims, HAUG provided them with false documentation showing how the investment money was purportedly being used, false information about upcoming real estate closings and re-sales of properties HAUG claimed to have flipped, as well as fictional documents showing “returns” from the so-called investment properties. In reality, HAUG spent the investment money on personal expenses, including credit card bills, and never purchased or sold any of the properties.

This case was the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.

Assistant United States Attorneys Kimberly A. Svendsen and Charles J. Kovats prosecuted this case.


Defendant Information:                                                                                                                     


Rosemount, Minn.


  • Wire fraud, 1 count


  • 49 months in prison
  • Three years of supervised release
  • $880,000 in restitution





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United States Attorney’s Office, District of Minnesota: (612) 664-5600

Financial Fraud
Updated October 25, 2018