Bond set for one defendant in mortgage fraud case

Robert Wrolstad, one of two defendants in a 34-count mortgage fraud case, appeared in federal court this morning, where U.S. Magistrate Lewis Blanton set bond at $20,000 and ordered him to appear for arraignment on Tuesday.

Wrolstad's co-defendant, Russell Todd McBride, was slated to appear before Blanton later today, when bond will be set in the case involving 12 homes and accusations that McBride and Wrolstad pocketed proceeds from almost $500,000 in inflated mortgages.

During the brief appearance, Blanton confirmed basic biographical information — Wrolstad, 59, lives in Overland, Mo. with his wife — and asked if Wrolstad understood the charges and his rights. Wrolstad replied that he did.

To be released pending trial, Blanton ordered Wrolstad to post 10 percent of the $20,000 bond as security. Blanton rejected a request from assistant U.S. Attorney Paul Hahn for a $50,000 bond. Hahn said the higher bond was justified by the significant losses and lengthy sentence possible in the case.

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."

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, Hahn said the indictment was kept under wraps for seven months because of the ongoing nature of the investigation. If convicted of all charges and given the maximum sentence, both McBride and Wrolstad face more than 500 years in federal prison.

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