A U.S. District Court jury in Cincinnati found homebuilder Bernard J. Kurlemann guilty of conspiracy and fraud for his role in a mortgage fraud scheme aimed at deceiving lenders by agreeing to sell high-end luxury properties to "straw buyers" - individuals who buy properties in name only.
Kurlemann was a Mason, Ohio-based homebuilder who owned and operated several residential development construction businesses, including two known as Kurlemann Homes of Long Cove and Long Cove Management LLC. The companies submitted false information on purchase contracts and other loan documents regarding down payments that were never made.
Kurlemann benefitted from the scheme by walking away from an estimated $3.5 million in mortgage debt, while receiving approximately $500,000 in seller's proceeds.
The jury convicted Kurlemann on two counts of loan fraud, punishable by up to 30 years in prison, and one count of conspiracy to commit loan fraud, punishable by up to five years. The law also requires restitution to the lenders.
Kurlemann also was convicted of one count each of bankruptcy fraud, concealment of assets and making false oaths - for hiding an asset from the bankruptcy trustee and his creditors when his company, Kurlemann Builders Inc., filed for bankruptcy in 2008. Those crimes are each punishable by five years’ imprisonment.
Three others charged with Kurlemann in the original January 2010 indictment have pleaded guilty.
Eric Duke, Newport, Ky., pleaded guilty to three counts of conspiracy and four counts of fraud. He is a self-employed tax preparer and interior designer and owned a property management company called Rivendale Property Management Group L.P. Terrence Monahan Jr., Cincinnati, formerly with Huntington National Bank, pleaded guilty to one count of making a false statement to the U.S. Department of Housing and Urban Development. Bryan Sanneman, Mason, Ohio, owner of Sanneman Homes Inc. pleaded guilty to two counts of conspiracy to commit loan fraud. All three are awaiting sentencing.
The charges were the result of a two-year investigation by the Greater Cincinnati Mortgage Fraud Task Force. Sentencing was scheduled for Feb. 9, 2011.