Andrew Berg took a day away from work at a Kansas City dermatology clinic Tuesday to watch his former father-in-law, Robert Wrolstad, being sentenced to nine years in federal prison for a massive mortgage fraud scheme.
Berg, a victim of the scheme who said he is now $1.5 million in debt, was one of three victims on hand while Wrolstad's attorney, Jeffrey Rosenswank, asked for a light sentence and time for Wrolstad to settle his affairs before reporting to prison. Both requests were denied.
"It is a good day," Berg said under his breath as Judge Robert A. Shaw announced the ruling during a hearing at the Rush H. Limbaugh Sr. U.S. Courthouse in Cape Girardeau.
Wrolstad was taken into custody immediately after being sentenced and ordered to pay $9.1 million in restitution to the lenders and investors who were cheated in the scam. Wrolstad's co-defendant, Russell McBride, was sentenced Monday to 11 years and three months in prison for his role in the scheme.
Wrolstad and McBride admitted using fraud and forgery to obtain in excess of $9 million for more than 300 properties in the Sikeston, Mo., area. When they entered guilty pleas in June, Wrolstad and McBride admitted using the companies Century Mortgage, Freedom Title and Residential Title to locate inexpensive homes in the Sikeston 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.
Wrolstad and McBride took advantage of relaxed lending standards in 2005 and 2006 to obtain the mortgages.
In a statement to Shaw before sentencing, Berg detailed how he had been persuaded to start buying homes in Sikeston as rental properties. He learned later that Wrolstad forged his name to loan documents and deeds for several of the 23 properties that were eventually listed in his name. All 23 properties have been seized in foreclosure, Berg said, and he is left holding the debt.
"My credit rating has been devastated," Berg told Shaw. "After 22 years in the Green Berets -- I am a combat veteran -- I cannot use my VA loans."
Assistant federal prosecutor Paul Hahn asked for the restitution order despite doubts, he said, that any money will ever be repaid.
Before the sentence was imposed, Rosenswank said a light prison term was justified because Wrolstad acted under direction from McBride as an employee, not a partner, in the scheme.
Shaw agreed, to a point. He noted that McBride received $6 million from the scheme and Wrolstad banked $2 million. "I do not see Mr. Wrolstad's role as being minor."
Rosenswank argued that much of the money Wrolstad received was paid out to others. "He has not profited from this," he said.
Hahn agreed that Wrolstad played a lesser role than McBride, but he said it wasn't as marginal as Rosenswank sought to portray. Wrolstad was in the thick of the scheme, Hahn said, notarizing forged documents and submitting doctored invoices.
"Mr. Wrolstad was far more than a lackey," Hahn said.
When he was given a chance to speak, Wrolstad said he accepted his guilt. "I am truly sorry, and I accept whatever decision you make," he said. "I hope someday, some of the people will forgive me."
555 Independence St., Cape Girardeau, MO