Minnesota Feds: Sale Buyback Foreclosure Rescue Scam Leaves Unwitting Investors, Homeowners, Lenders With $2.5M+ In Losses

In Minneapolis, Minnesota, the Star Tribune reports:

• A Mound man who allegedly defrauded six Northwest Airlines pilots and a flight attendant out of $1.5 million in a real estate investment scheme has been indicted by a federal grand jury on conspiracy, mail fraud and tax charges. The indictment, made public Thursday, accuses Timothy Lynn Beliveau, 41, of using two firms he owned to skim the equity from distressed homeowners who had turned to his companies for help in avoiding foreclosure.(1)

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• From 2004 until July 2007, the indictment says, Beliveau conspired to "fraudulently induce" investors into buying real estate at inflated prices with borrowed money as part of a "mortgage reconveyance" program. But Believeau and an unnamed coconspirator then spent the money raised from investors for their own use. In addition, the indictment says Beliveau raised more than $1 million from real estate investors that he then used to pay personal expenses.

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• The government says Beliveau preyed on people facing foreclosure by promising to sell their homes to investors who would let them remain in the homes and repurchase them on contracts for deed while they worked to restore their credit. In fact, the process "artificially increased the purchase price of the homes and therefore made it extremely difficult for the homeowners to reacquire them," the indictment says.(2) [...] "Ultimately, the defendant's scheme occasioned losses to approximately 14 investors, the investors' mortgage lenders and 35 distressed homeowners in an amount exceeding $2.5 million," the indictment says.

For more, see Mound man indicted in real estate scheme (Timothy Beliveau is accused of preying on people whose homes were being foreclosed).

From the Office of the U.S. Attorney (Minneapolis):

• Indictment: U.S. v. Beliveau,
• Press release: Mound man indicted for stealing more than $2.5 million in real estate fraud scheme.

(1) Reportedly, Beliveau owned American Alliance Mortgage Group, which had offices in Minnetonka, Plymouth, Roseville, Wayzata, Edina and Hudson, Wis., and U.S. Housing & Financial Services LLC, "which held itself out as a company that assisted distressed homeowners in foreclosures," the indictment says.

(2) Among those homeowners who were screwed over was Telsche Paulson. After her husband died and her downstairs tenants moved out, the 87-year-old fell behind on mortgage payments on the Minneapolis duplex she'd lived in for 50 years. Beliveau's company sent her a letter offering to save her home from foreclosure. Like most of the distressed homeowners who turned to Beliveau for help, Paulson ultimately lost the house. Although she won a lawsuit against Beliveau and his ex-wife, Shelley Milless, they said in court filings that they had no money left. sale leaseback