Two men indicted in Kansas mortgage fraud allegations

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In the following July 19, 2007 press release the United States Attorney for the District of Kansas announced that a grand jury had indicted Steve C. Middleton, 46, Overland Park, Kan., and Jared Minor, 36, Belton, Mo., who are charged with one count of conspiracy to commit bank fraud, four counts of bank fraud, three counts of money laundering and one count of criminal contempt of court.
According to the indictment:

Doing business as Somerset Homes, Middleton obtained loans and built homes in the greater Kansas City area.

Minor was a construction contractor who worked with Middleton.

As a result of fraud, Middleton received more than $1 million from Bank of the Prairie. On May 17, 2006, Middleton was indicted in another federal case. His co-defendants were F. Jeffrey Miller, Todd Earnshaw, Brian Rouse, Angela Parenza, Elizabeth Hessel, James Moser, and Lanny Ross. Middleton was released on bond after agreeing to comply with the court’s order prohibiting him from engaging in illegal activities. He and Minor violated the court’s order by defrauding the Bank of the Prairie and continuing to receive the proceeds of the fraud.

By submitting false and fraudulent loan documents, Middleton and Minor caused the bank to make loans it would not otherwise have made.

The defendants presented to the bank a copy of a $10,000 check from Minor to Somerset homes, representing it to be a down payment on the purchase of an $823,900 residence at 18882 Travis Lane, Stilwell, Kan. In fact, no down payment was made because Middleton returned the check to Minor.

Submitted to the bank an amendment to the sales contract falsely representing that the purchase price was increased from $823,900 to $1,124,000 and a document falsely stating that Minor had qualified for a $950,000 loan at 7.5 percent interest. A month later, they executed a change in the terms of the agreement to increase the amount borrowed from $659,100 to $899,200.
In the money laundering counts, they are charged with engaging in a series of monetary transactions involving a $656,000 construction loan, a $242,000 construction loan and $2.3 million from the sale of 1821 Travis Lane.
In a forfeiture count, the government seeks a money judgment for $1,424,000 in loan proceeds the defendants obtained from Bank of the Prairie, $22,000 in cash and a residence at 14910 Benson in Overland Park, Kan., which is valued at approximately $289,000.
The crimes are alleged to have occurred at various times in 2005, 2006 and 2007 in Johnson County, Kan.
If convicted, the defendants face a maximum penalty of 5 years and a fine up to $250,000 on the conspiracy charge, a maximum penalty of 30 years and a fine up to $1 million on each bank fraud charge, a maximum penalty of 10 years and a fine up to $250,000 on each of the money laundering charges, and a maximum penalty of 5 years and a fine up to $250,000 on the criminal contempt charge. The U.S. Department of Housing and Urban Development’s Office of Inspector General investigated. Assistant U.S. Attorney Richard Hathaway and Assistant U.S. Attorney Christine Kenney are prosecuting.
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