Ellendale man sentenced to 6 years in prison

Published 11:04 am Monday, May 14, 2012

A 37-year-old Ellendale man was sentenced to six years in prison last week for orchestrating an $18 million mortgage fraud scheme.

Michael Anthony Prieskorn pleaded guilty in March 2010 to the scheme, which included the purchase of about 70 residential properties in Florida and Minnesota between December 2006 and April 2007.

In his plea agreement, Prieskorn pleaded guilty to one count of conspiracy to commit wire fraud and one count of engaging in an illegal monetary transaction.

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The criminal activity took place under the business names Blackstone Sales and Maine Estates. His partner was mortgage broker Richard Mathew Laho, 55, of Buffalo.

According to a news release from the U.S. Attorney’s Office, Prieskorn admitted he and Laho conspired to obtain mortgage loan proceeds by luring investors to purchase properties. In return, he promised the investors $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.

Prieskorn maintained the mortgage loans were risk-free to their investors, knowing all the while the 20 investors were responsible for the loans, the release stated. Following the closing of these real estate transactions, many investors defaulted on their mortgage loans and were forced into short sales or foreclosure.

In pleading guilty, Prieskorn admitted he would also make investors appear qualified for loans by temporarily depositing money in their accounts without the lenders knowing. He structured financial transactions to conceal that he was the recipient of funds from the fraud.

The sentence Thursday came from U.S. District Court Judge Paul A. Magnuson.

Magnuson in February 2011 sentenced co-defendant Laho to five years probation on one count of mail fraud.

The two men were initially charged with 23 counts of wire fraud, one count of mail fraud and one count of conspiracy to commit wire fraud. Prieskorn also faced two counts of engaging in an illegal monetary transaction.

“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 of the Internal Revenue Service Criminal Investigation Division out of St. Paul, in a news release Thursday.

The 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.