Man sentenced in Southeast Missouri mortgage fraud case

Tuesday, November 17, 2009

A former Cape Girardeau man was sentenced Monday to 135 months in prison for his role in a mortgage fraud scheme involving the sale of residential real estate in Sikeston, Mo.

According to a news release issued by acting federal prosecutor Michael Reap, Russell Todd McBride was sentenced on one count of conspiracy to commit wire fraud and mail fraud, 12 counts of wire fraud and 12 counts of mail fraud. McBride, who once ran for city council in Cape Girardeau, was also sentenced on six counts of money laundering. After sentencing, McBride was taken immediately into custody to begin serving his sentence.

McBride was charged with finding buyers for low-value homes in Sikeston, then submitting bogus appraisals to lending companies to fool lending companies into providing mortgages that at times were as much as nine times the actual selling price.

McBride, who was an operator of Century Mortgage and Finance Inc., had offices in Sikeston, Cape Girardeau and St. Louis County.

McBride and his partner, Robert Wrolstad, the news release said, admitted to lining up buyers who obtained mortgages far in excess of the properties' worth and kicked 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 six years.

According to the news release, McBride and Wrolstad paid investors as an inducement for them to purchase residential real estate funded by loans brokered through Century Mortgage. One purchaser paid $66,000 for a property that the seller sold for $7,500.

There were about 341 other transactions involving the sale of residential real estate in which McBride and Wrolstad fraudulently obtained mortgage loan proceeds, causing losses to lenders on purchases of between $7 million and $20 million, the release said. McBride was ordered to pay restitution exceeding $9 million to the lenders and investors defrauded and victimized by the mortgage fraud scheme.

"Buying property can potentially be a good investment," said Roland J. Corvington, special agent in charge of the FBI in St. Louis in the release. "But because of unscrupulous people like Mr. McBride and Mr. Wrolstad, investors need to do some research and verify what they are buying and not have blind trust."

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