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Mortgage company owner sentenced in fraud scheme
Frederick Earle Deen, 30, was sentenced to 24 months in prison today for his role in a $20 million mortgage fraud scheme that operated in the Twin Cities.
U.S. District Court Judge Richard Kyle handed down the sentence, which was reduced because Deen cooperated with investigators and is expected to testify at future proceedings.
Sentencing guidelines called for Deen to spend 46 to 57 months in prison, Kyle said. Deen’s attorney, Joe Friedberg, told Kyle that “there’s no way he would dare not cooperate in the future.”
Deen was a part owner of Legacy Lending, which obtained mortgage loans from unsuspecting lenders using straw buyers. From 2005 to 2007, Deen and business associates used inflated appraisals and received $2.2 million payments out of loan proceeds. Some of the largest fraudulent deals involved properties in Rogers and Otsego, Minn.
Deen had earlier pleaded guilty to wire fraud involving a transfer of more than $575,000 and evading taxes on $200,000 in income. At Friday’s sentencing, he apologized to his friends and family for his actions.
At one point Deen’s sentencing turned into a debate over the role of Taylor Trump in the fraud scheme. Trump, who has a criminal record and served as a police informant, was sentenced to 20 years in prison back in 2008. The U.S. Bureau of Prisons has said Trump is in custody, but would not disclose the location.
Friedberg said that Deen and the others involved in the scheme “we’re scared to death” of Trump. “They were worried they’d end up with their bodies in a field,” Friedberg said.
But Tim Rank, an assistant U.S. attorney prosecuting Deen, said that Trump worked with Deen for two years, and that Deen also carried out the scheme on his own with other colleagues after Trump was no longer involved.
Earlier this week Thomas John Hunter, another part owner of Legacy Lending, pleaded guilty to wire fraud and money laundering.
Deen was released after Friday’s hearing and will surrender to federal authorities in six weeks to begin his sentence. Friedberg said he’ll ask federal authorities that Deen serve his time at a federal prison in Duluth, Minn.
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Just curious if he does two years and gets out with a load of cash or has it been taken.
Comment by Steve — March 6, 2010 @ 7:42 pm