Men accused in mortgage fraud scheme seek low bond

The two men accused of pocketing almost $500,000 from a mortgage fraud scheme pleaded poverty Thursday in seeking a low bond while they await trial.

U.S. Magistrate Judge Lewis Blanton set the bond at $20,000 each for Robert Wrolstad, 59, and Russell T. McBride, 46, after the attorneys for each man said they were unemployed and could not afford the higher $50,000 bond sought by assistant federal prosecutor Paul Hahn.

Wrolstad, of Overland, Mo., and McBride, of St. Charles, Mo., are charged with finding buyers for low-value homes in Sikeston, Mo., then submitting bogus appraisals to lending companies to fool the lenders in to providing mortgages that were as much as nine times the actual selling price.

Federal prosecutors allege that between July 2005 and November 2006, when mortgage companies nationally were lending with low standards, McBride and Wrolstad, acting through a company called Century Mortgage and Finance Inc., used knowledge of the loose lending practices to enrich themselves. Century Mortgage operated offices in Cape Girardeau, Sikeston and St. Louis.

The case involves 12 homes and the indictment accuses McBride and Wrolstad of pocketing proceeds from almost $500,000 in inflated mortgages.

McBride faces 31 felony counts, while Wrolstad is charged with 28 felony counts in the indictment.

McBride is a former Cape Girardeau resident. He was politically prominent in the late 1980s and early 1990s, holding such positions as Democratic Party county chairman and 8th Congressional District chairman.

The two men appeared separately before Blanton.

In arguing for the lower bond, Wrolstad's attorney, Patrick McMenamin, argued Wrolstad had sought to cooperate with investigators over the past year, was not a flight risk and could not afford to post a $50,000 bond. The higher bond, he said, "would be a hardship for his family."

The offers of cooperation show that Wrolstad did not intend to flee, McMenamin said. "He has known this was coming and is certainly not a flight risk."

Hahn said the size of the losses incurred by the lenders in the case and the lengthy sentence that could be imposed justified the higher bond.

Blanton allowed Wrolstad to pay $2,000 as security on the full $20,000 bond. When McBride was in court about an hour later, Blanton asked Hahn if there was any reason McBride should be treated differently from Wrolstad.

Hahn again cited the size of the alleged fraud, the severity of the potential punishment and added that McBride, unlike Wrolstad, has a criminal history.

McBride entered an Alford plea in 1997 on charges of conspiracy to commit arson in an attempt to obtain insurance money. He was given a suspended sentence.

Blanton allowed McBride to also post 10 percent, or $2,000, of the $20,000 bond amount.

Both court hearings were over quickly. Neither man entered a plea. Both men were ordered to return to court on Tuesday for arraignment.

Wrolstad and McBride were indicted in April, but the charges were kept under seal until Monday. After Wrolstad's hearing, Hahn said the indictment was kept under wraps for seven months because of the ongoing nature of the investigation.

rkeller@semissourian.com

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