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Benjamin Osmanson and Jillian Protzman Indicted for $26 Million Mortgage Fraud Scam
The former operators of an elegant Victorian-style bed & breakfast in northwestern Vermont have been indicted for mortgage fraud. Benjamin Osmanson, 29, of Sarita, Texas, and Jillian Protzman, 26, of Essex, Vermont, stand accused by the Office of the U.S. Attorney for the District of Vermont of obtaining more than $26,000,000.00 in fraudulent loans for the purchase of approximately 50 properties in California, Florida, Kentucky, and Vermont. According to the U.S. Attorney’s Office, Osmanson and Protzman owned The Historic Highgate Manor Inn (pictured above), located about 40 miles north of Burlington, VT, and 60 miles south of Montreal, Canada.
On Thursday, October 2, 2008, a federal grand jury in Burlington returned an eleven-count indictment charging Osmanson and Protzman with, among other offenses, conspiracy to commit wire fraud and money laundering. Benjamin Osmanson was arrested on 10/1/08 in Texas, while Jillian Protzman surrendered to the FBI in Burlington a week earlier.
The indictment alleges that from at least as early as January 2006 through at least April 2007, Osmanson and Protzman orchestrated the purchase of at least 50 properties in Vermont, California, Kentucky, and Florida in the names of at least 10 investors, obtaining more than $26,000,000.00 in loans to support the purchases. In Collier County, Florida alone, the pair is accused of obtaining more than 20 different residential properties.
According to the court documents, Ben Osmanson recruited friends, family members, and acquaintances to invest in real estate. Osmanson and Jillian Protzman then submitted fraudulent loan applications in the names of the investors to obtain fully-financed mortgage loans. The indictment states that Osmanson, Protzman, and others sought loans from multiple lenders and closed the loans for each investor within a short period of time in order to preserve the appearance of the investor’s good credit until the transactions were complete.
The indictment further alleges that Osmanson and Protzman enriched themselves with rebates, fees, and commissions connected to the fraudulent property purchases, and continued to recruit investors and submit applications for new loans even after the loans to the initial investors began to fail.
Relatively speaking, Vermont is far removed from the rest of the nation when it comes to real estate and mortgage fraud and foreclosure rescue scams. According to the latest U.S. Foreclosure Market Report™ published by RealtyTrac, Vermont continues to document the nation’s second lowest state foreclosure rate, with only one in every 17,198 households receiving a foreclosure filing in August.
Osmanson and Protzman, whose trial date has not been determined as of yet, face maximum possible terms of five years on the conspiracy count, 30 years on each count of wire fraud, and 10 years for each count of money laundering. However, as astute Flipping Frenzy readers know, the actual sentence in the event of a conviction will be determined in accordance with the federal sentencing guidelines.
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