ANCHORAGE, Alaska (1/25/12)--A condo developer has been indicted by a federal grand jury in Anchorage, Alaska, on charges that he lied and cheated on credit union loans connected with several construction projects, the U.S. Attorney's Office announced Friday.
The charges are one of a number of cases filed across the nation by the U.S. Justice Department targeting lenders, contractors, financial managers and others who contributed to the U.S. housing market collapse in the nation's financial crisis, said the office.
Lee Baker Jr., 55, is accused in the 14-count indictment of misleading Denali Alaskan FCU in several loan transactions in 2005. Baker is known for building "site condos," developments where inexpensive houses are crowded onto small land parcels with inadequate road access, said prosecutors (The News Tribune
Jan. 21 and MortgageDaily.com
The charges in the indictments include:
- Allegedly creating a series of land-sales transactions to obtain a loan from the credit union under false pretenses for buying and developing Lake View Estates in Wasilla. Court documents alleged he transferred the estates property from his company, Discovery Construction, to himself and then back to his company, and sought to finance what he allegedly termed a legitimate deal with the credit union. However, the indictment charges, he allegedly used the money to reduce his shareholder debt to the construction company.
- Allegedly lying to the credit union, saying he had completed 12 stages of an East Anchorage apartment project related to a $9.2 million construction loan and acquiring part of the loan with each claim. Prosecutors alleged little work had been done on the project.
- Allegedly engaging in money laundering by paying a subcontractor one a different project out of the funds for the apartment complex project.
Baker eventually defaulted on the loan, said the prosecutors, and in 2008, the credit union joined other creditors and contractors in suing the developer, alleging fraud. The credit union sought to recover $16 million in delinquent loans.