A federal jury found Marc Robert Engelmann, a Davenport, Iowa real estate attorney, guilty on all nine counts of bank fraud, wire fraud, and conspiracy.
Engelmann represented a seller who sold nine Davenport properties to Darryl Hanneken and Robert Herdrich. Hanneken and Herdrich recently were sentenced to 40 months in federal prison, five years of supervised release following their imprisonment, and restitution of almost $900,000 for their part in this fraud.
In the scheme, Herdrich and Hanneken would offer to pay a seller more than the asking price of the property, with a side agreement requiring the seller to refund the difference to them after closing. The side agreement, or kickback, was not disclosed to the lender. In one of the nine transactions in which Englemann was involved, the actual sale price was $95,000, but the parties represented to the lender that the purchase price was $125,000. The $30,000 difference was paid by the seller to Herdrich and Hanneken after the closing. Engelmann assisted with the fraud by preparing and sending false settlement statements to the closing agent, reflecting only the inflated price, and not showing the kickbacks. The wire fraud counts resulted from Engelmann transmitting the false statements via facsimile from his Davenport, Iowa office to the closing agent's office in Illinois.
How many other local attorneys were involved in these transactions?
Tuesday, September 13, 2011
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