Readers of Johnny Northside may be familiar with the damage real estate investors/fraudsters TJ Waconia had on North Minneapolis. The company was involved in a ton of fraudulent real estate transactions where homes were purchased at above their market value and later foreclosed while lots of money was pocketed.
This type of fraud involves a lot of players. If one person involved in the transaction says “no” the fraud can’t happen. But, no one said no, the fraud happened. Prices became inflated. Property values artificially inflated leading to unsuspecting home buyers paying more for their homes than they otherwise would have based on inflated comparable. And prices crashes as dozens and dozens of homes fell into foreclosure do to fraud.
One of the people involved in this process was Nathan Jesh. Without the work he did to close 175 sales, there would have been 175 fewer sales. Or, at least the fraudsters would have had to work harder to find a different accomplice. And, perhaps they would have had their scheme fall apart earlier while accomplice shopping?
Regardless, here is the cost of enabling fraud:
Nathan Daniel Jesh, 34, was sentenced Monday to three years probation for his role in the TJ Waconia mortgage fraud scheme. He pleaded guilty to one count of conspiracy to commit wire and mail fraud. Jesh, who was a closer at Total Title LLC, admitted in his plea agreement that he agreed to close at least 175 sales, though he knew that some loan applications contained fraudulent information. Jesh also knew that the seller – TJ Waconia – was providing the “straw buyer” with funds to do the deal.
There may be hundreds of home owners in North Minneapolis today who overpaid by $10,000 or more based on inflated comparables tied to the fraudulent transactions Nathan Jesh enabled. He didn’t hold someone up at gunpoint to steal from them. It’s much more subtle theft. And subtlety is why Jesh got probation while a guy robbing a gas station ends up behind bars.