Mound man charged in $2.5 million real estate fraud schemeby Elizabeth Dunbar, Minnesota Public Radio
St. Paul, Minn. — A federal grand jury on Thursday charged a Mound man with fraud in a real estate scheme that allegedly bilked investors out of more than $2.5 million.
According to the indictment, Timothy Lynn Beliveau orchestrated a scheme in which he persuaded investors to purchase real estate from homeowners facing foreclosure. The properties were sold to the investors at inflated prices, and Beliveau used the funds to buy boats, motorcycles and a Florida vacation home, according to court documents.
Beliveau, 41, was charged in federal court with mail fraud and conspiracy to commit mail fraud.
The alleged scheme took place between 2004 and 2007 while Beliveau was owner of U.S. Housing & Financial Services, a company that worked with homeowners near foreclosure.
According to the indictment, Beliveau used the company to encourage struggling homeowners to sell. The equity in the homes was to be deposited in an account administered by Beliveau, and he allegedly told those involved that it would be used to make monthly payments to the investors.
According to Beliveau's plans, the homeowners would eventually be able to buy back their homes, and they were allowed to stay in their homes during the whole process.
Investors, meanwhile, were told that the homeowners were unlikely to default on the contract-for-deed payments, and that if they did, there were ways the investors could be protected, according to court documents.
But the documents the investors took in seeking mortgages were fraudulent, because they reported artificially inflated values for the properties, the indictment alleges. That meant more money was going into Beliveau's account, and he spent the money on himself, the indictment said.
Most of the homeowners couldn't make monthly payments, so the investors' loans went into default.
In addition, Beliveau was charged with failing to pay $900,000 in employment taxes between 2003 and 2005.