ST. LOUIS (CN) – Two men pleaded guilty to federal charges of inflating the price of more than 250 properties, costing lenders $7 million to $20 million court in a mortgage scheme that artificially inflated appraisals. In one sale, a buyer spent $66,000 for a property that had sold for $7,500.
Russell Todd McBride, operator of Century Mortgage and Finance, and his employee Robert P. Wrolstad pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud, 12 counts of wire fraud, and 12 counts of mail fraud. McBride also pleaded guilty to six counts of money laundering, and Wrolstad to three counts of money laundering.
Prosecutors said the two recruited investors to buy real estate in the Sikeston area, in southeast Missouri. The sellers got their asking price, or near to it, but buyers paid significantly more because of inflated appraisals. McBride and Wrolstad siphoned off the difference.
The scheme lasted from July 2005 to November 2006. The two face long prison terms and hundreds of thousands of dollars in fines at their August sentencings. Prosecutors say McBride has no connection to St. Louis area homebuilder McBride and Sons.