Ex-University of Minnesota basketball player Sam Jacobson pleads guilty to mortgage fraud

Sam Jacobson, a University of Minnesota basketball standout and NBA player, pleaded guilty Monday to residential mortgage fraud over $35,000 in a Dakota County court. Jacobson's wife, Traci, pleaded guilty to aiding and abetting residential mortgage fraud.

Dakota County accused Jacobson in an August 2016 complaint of persuading his lender, JPMorgan Chase, to allow a short sale of his Apple Valley house because he was having money problems and had filed for bankruptcy in January 2011. Under the arrangement, the bank reduced the amount Jacobson owed on the loan, the criminal complaint said.

To complete the transaction, he and his girlfriend, Traci Quam (now Traci Jacobson), signed a document stating the sale of his five-bedroom, three-bath home at 7715 Gibraltar Terrace was an "arm's length transaction" between unrelated parties.

In fact, however, Traci Jacobson, 41, lived with Sam Jacobson, 42, for much of the time he was negotiating the short sale, violating the terms, the complaint said. Jason Madison, an employee of JPMorgan Chase, said that fact was significant and the short sale wouldn't have been approved had the bank known about their living arrangements.

After she bought the home, Sam Jacobson continued to live with her, as did his children when they were with their father, the complaint said.

"On paper, Sam moved out," Traci Jacobson said in an interview. "But in reality, he didn't."

This also violated the short-sale agreement, Madison said in the complaint.

Jacobson's Chapter 7 liquidation bankruptcy was approved in April 2011. He listed assets of $470,049 and debts of $760,689.

Traci Jacobson sold the house in late 2011 at a profit of $226,793.06, the complaint said, and used those funds to buy a new house in the 15700 block of Cobblestone Lake Parkway in Apple Valley for $552,500. Sam and Traci Jacobson got engaged the day that transaction closed. The two were married in June 2013, and they still live in the Cobblestone Lake Parkway house.

JPMorgan Chase sustained a loss of $78,607.77 on the short sale, the complaint said.

Jennifer Jacobson, Sam Jacobson's ex-wife, first told Apple Valley police about the matter in May 2013, the complaint said.

Ryan Garry, Sam Jacobson's attorney, said that his client realizes his actions regarding the short sale showed a lack of judgment and that he apologizes.

"He has always held himself to the highest degree of ethical character both on and off the court," Garry said in a statement. "He has admitted his mistake and finalized a complete restitution settlement with Chase Bank."

Count two against Sam Jacobson — theft by swindle over $35,000 — was amended to residential mortgage fraud, Garry said, and count one — theft by false representation over $35,000 — will be dismissed. Both Jacobsons will be sentenced Jan. 27.

Jacobson, a Cottage Grove native, graduated from Park High School, where he was named Minnesota Mr. Basketball during his senior year. He helped lead the Gophers to a now-vacated berth in the 1997 NCAA Final Four during his junior year. He played professionally for the Los Angeles Lakers, Golden State Warriors, and Minnesota Timberwolves.