On November 20, 2012 Scott D. Hoeft pleaded guilty to conspiracy to commit wire fraud. Hoeft, owner of Prime Title Services in Grand Rapids, was alleged to have engaged in a $12 million mortgage scheme involving lenders and title companies. Hoeft conspired with another man in the scheme identified only as CPG.
Court records revealed that Hoeft reached a deal with prosecutors prior to the case going before a grand jury for potential indictment, according to a news article at Mlive.com. Hoeft reportedly conspired with CPG from 2002 to 2006 in defrauding title companies and banks. The government accused Hoeft of obtaining loans from mortgage lenders on properties with prior mortgages and liens without the lenders' and title companies' knowledge.
In the plea agreement, Assistant U.S. Attorney Brian Delaney wrote, "Failure to disclose such prior and superior liens resulted in mortgage lenders making loans they would not otherwise have made resulting in lenders and title companies suffering substantial losses."
Ultimately, Hoeft and CPG conspired together to obtain construction loan financing from lenders without disclosing the existence of prior liens against property for home construction; once a buyer was secured for a home that had been constructed, resident mortgage lenders were not informed of the existence of prior liens, or in some cases Hoeft would disclose the liens, but fail to pay them from his escrow accounts where the mortgage loan proceeds had been deposited. The funds were instead used by CPG to operate his construction business.
Hoeft was sentenced on Monday, May 13 to five years and three months in federal prison; he was also ordered to pay more than $8 million in restitution. After serving out his prison sentence, Hoeft will be on supervised release for three years.
Michigan federal crime lawyers know that individuals accused of engaging in any type of fraudulent activity face serious criminal penalties if convicted. Penalties may include substantial time in federal prison, monetary fines and more.