Two plead guilty to Southeast Missouri mortgage fraud
Wednesday, June 3, 2009
Two mortgage brokers who admitted they crafted a scheme to defraud finance companies of large sums of money could receive federal prison terms ranging from seven to 25 years.
Robert Wrolstad and Russell McBride admitted using the companies Century Mortgage, Freedom Title and Residential Title to locate inexpensive homes in the Sikeston, Mo., area, line up buyers who obtained mortgages far in excess of the properties' worth and kick back the extra to McBride and Wrolstad. Wrolstad and McBride also admitted using their company accounts to launder the proceeds into personal bank accounts.
The scheme played out over a six-year period.
Wrolstad and McBride pleaded guilty Tuesday in St. Louis before U.S. District Judge Charles A. Shaw. Wrolstad pleaded guilty to 28 counts of money laundering, conspiracy, mail fraud and wire fraud. McBride, who was chastised by Shaw last week for trying to change lawyers in a last-minute attempt at delay, pleaded guilty to 31 counts of money laundering, conspiracy, mail fraud and wire fraud.
Shaw will sentence Wrolstad on Aug. 17 and McBride on Aug. 18. The sentencing will take place in Cape Girardeau.
A plea stipulation filed with the court that detailed the investigation shows the two men actually engaged in more than 250 separate property purchases that were fraudulent, assistant federal prosecutor Paul Hahn said.
Lenders and purchasers of the homes lost more than $7 million, Hahn said. Prosecutors did not reduce or dismiss any charges in exchange for the guilty pleas, he said.
"The discovery and the disclosures and the evidence would have supported all the charges set forth in the indictment," Hahn said, explaining why prosecutors did not reduce the number of charges as they worked to secure a guilty plea.
Under federal sentencing guidelines, Wrolstad could receive a sentence of nine years, two months to just less than 20 years, depending on his criminal history. If he provides substantial help to federal investigators as promised, he could see the minimum sentence be reduced to just more than seven years.
McBride, who was identified in the court papers as receiving the bulk of the fraudulently obtained money detailed in the indictment, faces stiffer penalties. He, too, has a chance of seeing his sentence reduced if he provides substantial help in ongoing investigations. The range for McBride is 11 to 25 years in prison, with a chance to cut as much as two years off the total if his cooperation is helpful.
According to the stipulations filed for each defendant, McBride pocketed $227,111.86 from transactions on five homes and Wrolstad netted $37,304 from three transactions. The indictment and stipulation details how the pair received $500,000 in loans for 12 homes that were purchased for about $185,000.
111 S. 10th. St., St. Louis, Mo.