In the following press release United States Attorney Rachel K. Paulose announced that A Prior Lake, Minnesota, mortgage broker and his assistant have been indicted by a federal grand jury for allegedly bilking vulnerable homeowners. Michael Fiorito, formerly a mortgage broker at American Allian Mortgage Company in Wayzata, and Kristin Louis Jerde of Minneapolis, who worked as Fiorito’s assistant, were charged with one count of conspiracy, three counts of mail fraud, and one count of engaging in a financial transaction with criminally derived property. The indictment was unsealed late Wednesday, following the arrest of Fiorito and Jerde. After making their initial appearance in federal court Wednesday afternoon, Jerde was released on bond.

The indictment in this case alleges that from January of 2004 through February of 2007, Fiorito and Jerde schemed to defraud homeowners who were either in foreclosure or behind on their mortgage payments. Specifically, they allegedly caused homeowners to refinance their homes and then stole some or all of the equity checks produced through the refinancing process. In some instances, Fiorito and Jerde also allegedly used physical intimidation to force homeowners to endorse equity checks over to them. In addition, Fiorito and Jerde allegedly induced homeowners to sell them or a third party their homes and then stole the sale proceeds intended for the sellers. The indictment states that during the scheme to defraud, Fiorito and Jerde converted to their own use approximately $160,000.

If convicted, Fiorito and Jerde each faces a maximum potential penalty of five years in federal prison for conspiracy, twenty years in prison on each of the mail fraud counts, and ten years in prison for engaging in a financial transaction with criminally derived property. Any sentence, however, will be determined by a judge.

This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation Division; and the U.S. Postal Inspection Service. Assistant United States Attorney David J. Maclaughlin is prosecuting the case.

Update on Tuesday, October 2, 2007 at 12:31PM by The Editor - Ian Shuter - ACFE, DMS

The Star Tribune reports that on Tuesday October 2, 2007 Michael Fiorito pleaded guilty. Kristin Jerde is expected to plead guilty tomorrow.

Please click here for the complete article. 

 

Update on Wednesday, May 27, 2009 at 10:03AM by The Editor - Ian Shuter - ACFE, DMS

A federal grand jury today convicted a 41-year-old Prior Lake man on seven criminal counts in connection with an equity-skimming scheme that targeted vulnerable homeowners.

After more than six hours of deliberation, on May 20 in St. Paul, a jury found Michael Fiorito guilty on all counts against him, including one count of conspiracy to commit mail fraud and six counts of mail fraud.

According to the indictment and evidence presented during the nearly three-week trial, Fiorito was a mortgage broker at three different Minnesota mortgage companies from 2003 through January 2007. Working with his assistant, Kristin Louise Jerde, he devised a scheme to defraud homeowners who were in foreclosure or behind on their mortgage payments.

Read the full press release here