A Minnesota couple running a market and asset management real estate firm were sentenced in U.S. District Court this week for their part in a long-running fraud scheme, the U.S. Department of Justice (DOJ) announced.
Jeffrey Detloff, a Realtor according to the DOJ, and the owner of Detloff Marketing and Asset Management Inc., was accused of running an illegal bidding and kickback scheme in connection with foreclosed properties, along with his wife and the business’ accountant, Lori Detloff.
Jeffrey Detloff was sentenced to 16 months in prison and two years of supervised release for charges of mail and wire fraud, while Lori Detloff was sentenced to seven months in prison and one year of supervised release for aiding and abetting the crime. The firm was ordered to pay a $593,000 fine and restitution to the victims of the scheme.
“Today’s sentences reflect the significant harm caused by the defendants’ years-long scheme that lined their pockets by defrauding lenders and undermining competition,” Makan Delrahim, an assistant attorney general with the Department of Justice’s antitrust division, said in a statement. “The Antitrust Division and its partners are committed to rooting out anticompetitive conduct, whatever its form, and holding companies and executives accountable.”
Jeffrey Detloff, according to court documents, conspired to defraud lenders and guarantors who hired him to oversee maintenance and repairs on foreclosed homes, while acting in his capacity as a Realtor. Detloff was a licensed real estate salesperson in the state from 1991 to 2014, then a licensed real estate broker from 2014 to 2019, according to public records. It’s not clear, however, if he was a member of the National Association of Realtors, as DOJ states.
Detloff was charged with steering maintenance and repairs contracts to companies that would kickback to his own company, according to the complaint. Detloff also allegedly included the kickbacks within the bids and invoices sent to the lender. Lori Detloff was responsible for ensuring the kickbacks — which totaled $291,505 — were paid to the company.
“The defendants created a scheme to squeeze as much money as they could from these properties with no regard for the victim,” Jill Sanborn, the FBI special agent in charge of the Minneapolis Division, said in a statement. “These scams victimize a large number of people and the FBI along with our law enforcement partners will continue to work these schemes and hold accountable those responsible for defrauding the system.”
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