Two accused of mortgage fraud to be in court today

Two St. Louis-based businessmen with extensive ties to Southeast Missouri will appear in federal court today, one to change his not guilty plea on charges of looting mortgage lenders and the other to obtain a new lawyer.

Robert P. Wrolstad will change his plea on 28 felony fraud charges related to the purchase of 12 properties. Entries in the federal court docket do not indicate what, if any, deal Wrolstad has made with prosecutors to change his plea. Wrolstad faces 515 years in prison as well as a fine of up to $250,000 on each count in the original indictment, which was announced in November.

Russell T. McBride, who in court documents was listed as living in Creve Coeur, Mo., but who has extensive political ties to the Democratic Party in Southeast Missouri, notified the court through attorney Thomas Liszewski of Jackson that he intends to obtain a new lawyer. McBride faces a total of 31 fraud charges, with a potential penalty of 545 years in federal prison and a fine of up to $250,000 in each case. McBride was also originally scheduled for a change of plea hearing.

McBride is scheduled to appear at 11 a.m. before U.S. District Judge Charles A. Shaw. Wrolstad's change of plea hearing is scheduled for 2:30 p.m. before the same judge.

Assistant federal prosecutor Paul Hahn, who is handling the prosecution, declined to comment on the cases.

Jeffrey Rosenswank, attorney for Wrolstad, said he would withhold comment until after his client appears in court.

The indictment against McBride and Wrolstad lists 12 properties, most in Sikeston, Mo., as the targets of their scheme. In each case, McBride and Wrolstad are accused of vastly inflating the value of the homes, which typically sold for less than $20,000, and obtaining mortgages for two to nine times the purchase price.

McBride and Wrolstad are accused of money laundering, using backdoor channels to provide purchasers with insufficient income the money needed for down payments and closing costs. When the inflated check for the mortgage arrived, Wrolstad and Russell would split the proceeds, according to the indictment.

Based on the prices paid and the amounts of mortgages obtained, McBride and Russell received $500,000 in loans on properties worth only $185,000. When the indictment was unsealed in November, then-federal prosecutor Catherine Hanaway said she was sure that there were dozens, if not hundreds, of additional properties involved with the scheme but that clear evidence was available for the dozen properties cited.

rkeller@semissourian.com

388-3642