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Couple Faces Jail For Running Fraudulent Scheme In Minnesota

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A Minnesotta couple, who ran a real estate company, were sentenced to jail for running a fraudulent bidding and kickback scheme in connection with foreclosed properties.

The U.S. District Court in St. Paul, Minnesota, sentenced Jeffrey J. Detloff, who is the owner of Detloff Marketing and Asset Management Inc., to 16 months' imprisonment and two years of supervised release. His wife and the accountant of the Hopkins-based company, Lori K. Detloff, was sentenced to seven months' imprisonment and one year of supervised release.

According to court documents, between September 2007 and June 2015, Jeffrey Detloff conspired to defraud mortgage lenders and guarantors who had hired Detloff, a realtor, to oversee maintenance and repairs on foreclosed homes in the Minneapolis-St. Paul area. Jeffrey Detloff directed maintenance and repair contracts to contractors who would pay a kickback to Detloff Marketing.

Detloff Marketing received more than $291,505 in kickbacks, it is estimated.

Jeffrey Detloff and Detloff Marketing included the kickbacks within bids and invoices sent to the lender or guarantor for reimbursement on maintenance and repairs. Lori Detloff, as the firm's accountant, was responsible for ensuring the kickbacks were paid by contractors to Detloff Marketing.

Detloff Marketing has been ordered to pay a $593,000 criminal fine. The defendants were also sentenced to pay full restitution to the victims of the scheme, the Department of Justice said.

Detloff Marketing and Jeffery Detloff pleaded guilty to charges of conspiracy to commit mail and wire fraud affecting a financial institution. Lori Detloff pleaded guilty to helping and abetting these offenders.

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