FBI targeting Roseville company in fraud case
MINNEAPOLIS (AP) — The owners of a Roseville-based real estate business are the targets of a mortgage fraud investigation that involves homes across the Twin Cities, according to a federal search warrant affidavit.
The affidavit made public Tuesday names the business, TJ Waconia, and its owners, Jonathan E. Helgason, 44, of Chisago City, and Thomas J. Balko, 37, of Rogers. The business and others related to it were raided earlier this month by federal agents seeking records.
The TJ Waconia investigation is the latest of several mortgage fraud cases in the Twin Cities to be investigated or charged by federal or Hennepin County authorities. While most of the cases are in north Minneapolis, affected properties range from New Prague to Champlin.
The affidavit by FBI agent Jennifer Khan alleges that Helgason and Balko and their company defrauded property investors and lenders that held mortgages on their properties. Helgason and Balko didn't return phone calls.
"These guys have hurt a lot of people," said Patrick Burns, a private attorney who has sued Balko and Helgason. "They targeted certain types of people, they told similar lies and they got them involved in schemes that were fraudulent. They were designed to fail. It's a classic Ponzi scheme."
According to property records, the company has purchased hundreds of properties from southern Anoka County to eastern Dakota County. The affidavit indicates that about 150 north Minneapolis properties foreclosed on in one six-month period earlier this year passed through TJ Waconia's hands.
That's one in every five foreclosed properties in that area during that period, bringing more stress to neighborhoods through boarded-up homes on blocks and uprooted families who place increased demand on city services.
Local officials who brought the real estate firm to the attention of federal investigators this summer were pleased by news that the investigation has found probable cause of criminal activity.
"I'm delighted," Minneapolis City Council President Barbara Johnson said. "I'm glad that they're pursuing these people because they have done tremendous economic damage."
The affidavit is based, in part, on three unidentified people who bought homes through TJ Waconia. It indicates that the firm bought numerous homes out of foreclosures and resold them to investors at significant markups. Some investors thought they were purchasing the properties outright, while others thought that they were lending the firm their credit, the affidavit said.
But it said the firm did the deals in a way that creates probable cause that Balko and Helgason submitted fraudulent documents to lenders. That conduct also likely amounts to mail, bank and wire fraud, the affidavit said.
--- Information from: Star Tribune, http://www.startribune.com