Edina mortgage broker charged in scheme

An Edina mortgage broker was charged Friday for his role in a $20 million mortgage fraud scheme that involved 57 properties.

Derrick Lance, 40, was charged in federal court with one count of conspiracy to commit wire fraud. If convicted, he faces a maximum penalty of 20 years in prison, according to a release issued Monday by the U.S. Attorney's Office.

Lance is charged with conspiring with others between 2004 and 2007 to obtain mortgage loan proceeds based on fraudulent documentation. One of his partners in the scheme was Roger Hanks of Coon Rapids, who pleaded guilty to one count of conspiracy to commit wire fraud June 27.

According to the charges against Lance, unnamed co-conspirators identified and recruited buyers for residential properties. Two of the co-conspirators allegedly told buyers they would receive kickbacks after the property sales closed and were told they could put those payments toward the mortgages or use them to improve the properties.

Lance allegedly helped prepare and submit false mortgage loan applications, which misrepresented the buyers' true financial situations. The fraudulent documents were used to get loans approved, and loan proceeds were disbursed by wire transfer into the accounts of various title companies.

Lance and his co-conspirators then allegedly caused those title companies to disburse some proceeds from each transaction into bank accounts not associated with the property buyers in order to conceal the undisclosed kickbacks.

According to the charges, Lance received about $200,000 for assisting buyers to secure mortgage loan funding for 26 properties.

Susan Feyder • 612-673-1723