construction loan fraud

A 49-year-old Sandy man was recently convicted of wire fraud and money laundering arising out an illegal construction financing scheme. The man's conviction was announced by the Utah division of the Dept. of Justice late last week. The DOJ says that U.S. District Judge Ted Stewart imposed a 41 month prison sentence on the man last Wednesday.

Prosecutors allege that the man and two accomplices allegedly swindled a father and son into providing a construction bridge loan by misrepresenting the value of property which they put up as collateral for the loan.

A construction bridge loan is a common type of short-term loan used to finance a construction project pending the approval of a larger or longer-term loan from a bank or set of financiers. Authorities say that the men involved in the construction fraud scheme did try to pursue funding for a short while but abandoned their attempts.

Special agents from the FBI and IRS investigated the terms of the loan and allege that the defendants diverted funds from the loans to their personal use and laundered the money through the bank account of the Sandy man's mother.

Wire fraud and money laundering are common federal charges to arise out of high-value fraud schemes involving tax reporting or interstate banks. Wire fraud charges are often brought in place of state charges which could carry smaller sentences.

Source: Utah DOJ, "MUNOZ SENTENCED TO 41 MONTHS IN FEDERAL PRISON AFTER PLEADING GUILTY TO WIRE FRAUD, MONEY LAUNDERING IN CONNECTION WITH PROPERTY FRAUD SCHEME NEAR PARK CITY," Jan 3, 2013