Archive for Saturday, May 20, 2006

Builder charged with bank fraud

May 20, 2006

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— A man once described as the largest developer and home builder in the Kansas City metro area was charged in what federal prosecutors said was a $25 million scheme of bank fraud, money laundering and conspiracy.

Eight of F. Jeffrey Miller's associates also were named in the 60-count indictment returned Wednesday by a federal grand jury and announced Thursday.

Miller, of Stanley, is charged with 53 counts of bank fraud, one of conspiracy and five of money laundering.

In the indictment, Miller's finance and home building companies are described as a "fraudulent real estate machine" that targeted vulnerable homebuyers.

"Mr. Miller advertised that he could sell homes to buyers with credit problems," U.S. Atty. Eric Melgren said in a statement. "In fact, with the help of willing co-conspirators, he defrauded banks and coerced buyers."

In some cases, the indictment alleges, buyers were urged to move into homes built by Miller before their loans closed - only to then be hit with higher costs, which they had to accept to avoid eviction.

The indictment also alleged that Miller controlled a scheme that included fraudulent loan applications and falsified appraisals.

"We intend to plead not guilty and vigorously defend ourselves," said Jim Wyrsch, an attorney for Miller.

In 2000, after investigations in Kansas and Missouri, Miller consented to refund money to some former customers and to limit his involvement in financing real estate transactions.

Wednesday's indictment alleges that Miller built homes through his Star Land Development and Miller Enterprises, then steered prospective buyers to Associated Capital and Associated Finance, two other companies he founded.

Two loan officers - Angela Parenza, 39, of Kansas City, Mo.; and Elizabeth L. Hessel, 46, of Overland Park - also were indicted.

The indictment alleged that Parenza and Hessel, while working for for Associated Capital, "would do anything required to complete a loan closing, including but not limited to forging potential buyers' signatures on loan documents and providing home purchasers with down payments and closing costs, at the direction of Miller."

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