Bond set for defendants in mortgage fraud case

Both defendants in a 34-count mortgage fraud case appeared separately in federal court this morning, where U.S. Magistrate Lewis Blanton set their bond at $20,000 each.

Russell T. McBride, 46, and Robert Wrolstad, 59, will be arraigned Tuesday. Wrolstad and McBride are charged with finding buyers for low-value homes in Sikeston, then submitting bogus appraisals to lending companies to fool lending companies in to providing mortgages that at times were as much as nine times the actual selling price.

The two were indicted in April, but the charges were kept under seal until Tuesday. After Wrolstad's hearing, assistant U.S. Attorney Paul Hahn said the indictment was kept under wraps for seven months because of the ongoing nature of the investigation.

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

Each man was posting 10 percent of the $20,000 bond. Both are currently unemployed, and conditions for their release pending trial includes provisions that they seek work but not in the financial services industry.

Blanton rejected a request from a $50,000 bond. Hahn said the higher bond was justified by the significant losses and lengthy sentence possible in the case. In McBride's case, Hahn added that his criminal record was a factor in seeking the higher bond.

McBride, a former Democratic Party Cape Girardeau County and congressional district chairman, entered an Alford Plea in 1997 on charges of conspiracy to commit arson in an attempt to obtain insurance money.

Both court hearings today were over quickly. Neither man entered a plea.

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

Between July 2005 and November 2006, when mortgage companies nationally were lending with low standards, federal prosecutors allege that 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.

In arguing for the lower bond, Wrolstad's attorney, Patrick McMenamin, argued that 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."

If convicted of all charges and given the maximum sentence, both McBride and Wrolstad face more than 500 years in federal prison. Federal sentencing guidelines will govern the final sentence if the men are convicted.

For updates, check back at semissourian.com or read Friday's Southeast Missourian.