A long-time Minnesota home builder, Parish Marketing and Development
Corporation (PMDC), and its owners, pleaded guilty in federal court today
to conspiring to commit mortgage fraud and money laundering charges arising
from their scheme involving approximately 200 residences and approximately
$100 million in loan proceeds. PMDC and its owners acknowledged obtaining
more than $25 million for PMDC from the scheme.
PMDC, its owners, Michael Alan Parish, 62, and his wife, Ardith Ann
Parish, 61, and a PMDC agent, Christopher David Troup, 39, all of Eagan,
appeared before Judge Ann D. Montgomery and pleaded guilty to participating
in the conspiracy.
According to their pleas, all four defendants acknowledged participating
in the mortgage fraud scheme, by which PMDC utilized “straw buyers” to
purchase approximately 200 properties built by PMDC, primarily in the
New Prague, New Market and Lonsdale area. In total, the scheme obtained
nearly $100 million in loan proceeds, with PMDC receiving in excess of
$25 million from these loan proceeds.
On Sept. 20, 2007, Melissa Smith, of Ohio, appeared in federal court
and pleaded guilty to conspiring to commit mortgage fraud. Among other
things, Smith admitted to acting as a straw buyer for the scheme, purchasing
46 residences for approximately $20 million from October 2004 through
January 2007.
The four defendants today also acknowledged completing loan applications
for the straw purchases, which included false information, executing
loan documents in the names of the straw buyers, and manufacturing and
providing false documentation, such as false representations of employment
and false verifications of deposit, for the straw buyers for purposes
of obtaining loan proceeds to purchase the properties from PMDC.
On Sept. 5, 2007, Ramiz Yousef Saadeh, a former US Bank officer, appeared
in federal court and pleaded guilty to conspiring to commit mortgage
fraud. Among other things, Saadeh admitted providing false verifications
of deposit to the home builder on behalf of straw buyers.
The four defendants today also admitted providing false information
that resulted in appraisals that overstated the amount for which the
residences could have been sold at the time of the transaction in a normal,
arms-length transaction. These appraisals supported a higher sales price
to the straw buyers, allowing PMDC to obtain additional funds from the
loan proceeds.
On Oct. 11, 2007, Donald Todd Yeager, of Oklahoma, appeared in federal
court and pleaded guilty to honest services fraud. Among other things,
Yeager admitted providing misleading and inflated appraisals to the home
builder.
The four defendants today also admitted that the straw buyers did not
view the residences they were purchasing, did not negotiate the purchase
price of the residences, and, often times, did not execute the sales
documents and loan documentation, which were instead signed by the defendants
pretending to be the straw buyers.
On Sept. 7, 2007, Kristopher Kenton Robbins, a closing agent and licensed
notary public, appeared in federal court and pleaded guilty to conspiring
to commit mortgage fraud. Among other things, Robbins admitted allowing
signatures of the straw buyers to be signed by others.
Pursuant to the scheme, the four defendants admitted that the straw
buyers – the nominal owners of the residences – made no payments
on the mortgages that were taken out in their names. Instead, PMDC made
all payments or allowed mortgages to go into foreclosure. Often times,
PMDC utilized proceeds from the sale of one residence to a straw buyer
to make monthly payments for the mortgages held on other residences in
the names of other straw buyers.
In addition to the mortgage fraud conspiracy count, PMDC, Michael Parish
and Troup also pleaded guilty to a money laundering count.
According to the terms of the plea agreements, the defendants will
be sentenced based on determinations made by the court regarding the
full extent of loss, the number of victims and the defendants’ respective
roles in the scheme. Pursuant to the terms of the plea agreements, the
government contends the scheme may have resulted in a loss of as much
as $50 million (depending on the value of the residences) and has 50
or more victims.
According to the plea agreements, depending on the determinations made
by the court, the federal sentencing guidelines call for a sentence of
between 11 and 14 years imprisonment for Michael Parish, a sentence of
between nine and 11 years imprisonment for Troup, and five years imprisonment
for Ardith Parish, who was deemed to be a minor participant.
Pursuant to the plea agreements, the government will also seek an order
of full restitution for the victims of the fraud.
During the hearing today, the government noted that the investigation – which
has now resulted in guilty pleas from the home builder and seven individuals
in the past eight weeks – has progressed extremely rapidly in an
effort to address the impact of the fraud on the community. The government
and the defendants indicated that they would jointly seek the appointment
of a receiver to assist in the maximization of the value of the properties
and PMDC’s assets so as to minimize the impact on the community
and the losses to the victims.
This case is the result of an investigation by the Federal Mortgage
Fraud Task Force, including the Internal Revenue Service-Criminal Investigations
Division, and the Federal Bureau of Investigation. The investigation
has been assisted by the Minnesota Department of Commerce, the Scott
County Sheriff’s Office, the Rice County Sheriff’s Office,
the Le Sueur County Sheriff’s Office, and the New Prague Police
Department. The case is being prosecuted by Assistant U.S. Attorney Joe
Dixon.
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