Antitrust Law Daily Guilty pleas entered in U.S. fraud suit against Minnesota real estate company, couple
Thursday, July 25, 2019

Guilty pleas entered in U.S. fraud suit against Minnesota real estate company, couple

By Jeffrey May, J.D.

Trial for three defendants on fraud and conspiracy charges scheduled to begin August 19 is cancelled.

A Minnesota real estate company, as well as the company's owner and accountant, pleaded guilty today in the federal district court in St. Paul, Minnesota, for their participation in a long-running fraudulent bidding and kickback scheme in connection with foreclosed properties, the Department of Justice announced. Detloff Marketing and Asset Management Inc. and a husband and wife team behind the firm—Jeffery J. Detloff and Lori K. Detloff—were indicted in August 2018. They were charged with conspiring to commit mail fraud and wire fraud affecting financial institutions, from September 2007 through June 2015. In addition to the conspiracy charge, there were four separate counts of mail fraud and four separate counts of wire fraud (U.S. v. Detloff Marketing and Asset Management, Inc., Case No. 0:18-cr-00197-PAM-HB).

The victims of the scheme were mortgage lenders and guarantors who had hired Detloff, a realtor, to oversee maintenance and repairs on foreclosed homes in the Minneapolis-St. Paul area. According to the government, Jeffery Detloff steered maintenance and repair contracts to contractors who would pay a kickback to Detloff Marketing. Unbeknownst to his customers, Jeffery Detloff and Detloff Marketing included the kickbacks within bids and invoices sent to the lender or guarantor for reimbursement on maintenance and repairs. Lori Detloff was an accountant responsible for ensuring the kickbacks were paid by contractors to Detloff Marketing. In all, Detloff Marketing received over $291,505 in kickbacks, the government charged.

Detloff Marketing and Jeffery Detloff pleaded guilty to Count 1 of the Indictment, which charged a conspiracy to commit mail and wire fraud affecting a financial institution, according to the announcement. Lori Detloff pleaded guilty to aiding and abetting the principal offense described in Count 4 of the indictment, mail fraud affecting a financial institution. As part of their plea agreements, the Antitrust Division agreed to move to dismiss the remaining counts against Detloff Marketing, Jeffery Detloff, and Lori Detloff upon sentencing. In addition to their guilty pleas, the defendants agreed to pay restitution in the amount of $291,505. The terms of the plea agreements are subject to court approval.

Suppression of evidence. The trial in the case had been rescheduled to July and then August. There was a dispute over suppression of evidence. In June, the district court concluded that Jeffery Detloff's statements made during questioning should not be suppressed, despite the defendant's contention that he was subjected to a custodial interrogation and was not given a Miranda warning. Detloff was not in custody during questioning, and no Miranda warning was required, the court held.

Attorneys: Andrew K.M. Rosa, Department of Justice, for the United States. Ryan Patrick Garry (Ryan Garry, Attorney, LLC) for Detloff Marketing and Asset Management, Inc.

Companies: Detloff Marketing and Asset Management, Inc.

MainStory: TopStory Antitrust AntitrustDivisionNews MinnesotaNews

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