The developer of Chateau Ridge Condominiums in Burnsville pleaded guilty Monday to his role in a scheme to defraud mortgage lenders in connection with the sale of some of the condos.
John Michael Stevens, 47, of Lakeville, pleaded guilty in federal court in St. Paul to one count of conspiracy to commit wire fraud, according to the U.S. Attorney’s Office in Minnesota.
In his plea agreement and in court, Stevens admitted that in 2007, he conspired with others to defraud lenders who were financing his sale of certain units at Chateau Ridge. The development is located west of Interstate 35 and north of Buck Hill.
In one of the sales, Stevens admitted to misrepresenting the true purpose of a payment that was to be made from mortgage loans proceeds, according to a U.S. Attorney’s Office news release.
In that sale, he directed the loan closer to state in closing documents that a payment from loan proceeds was to satisfy a pre-existing mortgage on the property, even though he knew that wasn’t the case. The loan was ultimately approved. The lender in that sale lost an estimated $227,712 when the unit went to foreclosure.
Stevens, who was indicted last November, also admitted that he arranged for the buyers of four other units to be repaid their earnest money down-payments and closing costs. In effect, the buyers purchased the units for an actual price lower than what was disclosed to the lenders. The total amount refunded to the buyers of those four units was about $240,500.
Stevens faces a maximum penalty of 20 years in federal prison. His sentencing has not been scheduled.