Mortgage fraud in Cities on FBI radar

Mortgage fraud in Cities on FBI radar

There are 1273 comments on the Star Tribune story from Jul 21, 2007, titled Mortgage fraud in Cities on FBI radar. In it, Star Tribune reports that:

“We've seen properties we think are problematic and they turn up TJ Waconia”

Federal investigators are probing a renewed rash of potential mortgage fraud in the Twin Cities area in response to reports of a large number of unusual real estate transactions in north Minneapolis and ... via Star Tribune

Join the discussion below, or Read more at Star Tribune.

Victim

Houston, TX

#364 Apr 17, 2008
Jon not pay his debts?? Oh come on...you must be some how mistaken. Who the hell does he not owe money to??

They live in Chisago Lakes...address is easy enough to find. I would suggest going and knocking on the door and see if Amy will write you a check. Otherwise check out Jon's big garage with his snowmobiles, Harley, convertable,etc. You can get a lien on anything in his name and have the Sheriff just go pick it up. You can start with the MN Department of Motor Vechicles for anything registered in their names.
Victim T a fraud

Minneapolis, MN

#365 Apr 17, 2008
Victim wrote:
Jon not pay his debts?? Oh come on...you must be some how mistaken. Who the hell does he not owe money to??
They live in Chisago Lakes...address is easy enough to find. I would suggest going and knocking on the door and see if Amy will write you a check. Otherwise check out Jon's big garage with his snowmobiles, Harley, convertable,etc. You can get a lien on anything in his name and have the Sheriff just go pick it up. You can start with the MN Department of Motor Vechicles for anything registered in their names.
How admirable of you - skip over the post on one of the real victims of N. Mpls., and her family and how justice is NOT being served, to answer a question of petty dollars. This family lost their child. You care so much about the North side - SHOW IT!
Victim

Houston, TX

#366 Apr 18, 2008
Helgason Balko GUILTY
Two men behind one of the largest mortgage fraud schemes to hit the Twin Cities area pleaded guilty to mail fraud Thursday in federal court.
Thomas J. Balko and Jonathan E. Helgason, co-owners of TJ Waconia, pleaded guilty to a three-year scheme that involved 162 properties and $35 million in mortgages.
Most of those properties were in north Minneapolis where a city lawsuit charges that the men and their firm laid waste to three neighborhoods, leaving blocks dotted with vacant, deteriorating housing. They turned 141 of the properties over to a court-appointed receiver this week.
Balko, 37, of Rogers, and Helgason, 45, of Chisago City, entered their pleas to U.S. District Judge Joan Ericksen under a deal negotiated between their attorneys and the U.S. attorney's office, represented by prosecutor Joseph Dixon.
"I'm delighted," said City Council President Barbara Johnson, who conveyed initial neighborhood suspicions about the firm to the FBI.
"I look forward to gathering some victim-impact statements for sentencing from the community," she said.
Helgason faces a recommended sentence of up to about 12 1/2 years, while Balko faces a sentence of up to about 10 years. The sentence will depend on the court's determination of how much money was lost and how many people the pair victimized. The government contends the scheme cost more than 50 victims as much as $20 million, figures the pair dispute. Helgason's proposed sentence is greater because he was a licensed real estate agent, but he's fighting to have that factor excluded from consideration.
The government estimates the firm will be fined between $10.8 million and $21.6 million, but restitution to victims takes precedence. Those are believed to be investors who bought properties in the scheme, some of whom have sued TJ Waconia and the lenders.
Neighborhood spotted scheme
The scheme was initially uncovered by neighborhood association staffers in the Folwell and Webber-Camden areas. "It's sort of a vindication of our ability to recognize fraud when we see it," said Roberta Englund, neighborhood staff chief. She said lenders in the scheme also need to be held accountable for making bad loans.
Here's how the scheme worked: From 2005 to 2007, the pair worked through a variety of companies to buy properties and shortly resell them to investors for $20,000 to $60,000 more. Most investors didn't even inspect the properties, the plea agreements said.
Investors were told they were lending their credit to the company for a payment of $2,500 upon closing and added payments in two years when the firm would repurchase the property. The investors were straw buyers because they held the property in name only, and the firm fronted them money for the purchases. The firm made payments to investors so they could pay the mortgages on the properties. Ultimately the scheme collapsed, leaving the investors owing mortgages that exceeded the property value. Most of the properties are in foreclosure.
Further prosecution possible
The plea agreements do not require Balko and Helgason to cooperate in further investigations by the FBI, postal inspectors or tax investigators. But they hint at another possible avenue of prosecution by alleging that the men worked with others to present fraudulent loan applications to lenders that overstated investor incomes.
Neither man offered any comment on the scheme during their court appearance. "They're eager to make good on this situation," Allan Kaplan, Balko's attorney, said after the hearing.
Steven Meshbesher, who represented Helgason and the firm, noted that the defendants complied with a city request to turn over the north Minneapolis properties as part of the city lawsuit.
"This was not his intention,'' Meshbesher said of his client. "Things developed that he did not intend to do. He feels bad about it.''
Steve Brandt •
whatever

Minneapolis, MN

#367 Apr 18, 2008
NO, he feels bad that he got caught. And balko is just too plain stupid to know what he was doing. He's the retarded kid out in right field that keeps pissing himself. What are you suppose to do but smile at him.
The Preacher

Saint Paul, MN

#368 Apr 18, 2008
"Do not exploit the poor because they are poor and do not crush the needy in court, for the LORD will take up their case and will plunder those who plunder them."

-Proverbs 22:22-23

So glad to see justice is finally on the way to the evil ones.

THE PREACHER
Anonymous

Minneapolis, MN

#369 Apr 18, 2008
25moved on wrote:
I think it is hysterical that the NRG dance teachers are trying to distance themselves so far from Tom and Jill. They couldn't have had their lips any tighter on their A$$, both in Myrtle Beach last summer and at the studio. When there was nothing left to get, they moved on and are trying to make it look like they were just innocent bystanders with no involvement in how the studio was run. Shannon was the director, not the Balko's. So glad to have moved before this year, there are other dance studios out there that truly do things right and actually do care about the kids! Don't suffer at NRG!
I can't believe you'd say that, you dispicable jerk! Balko ruined my best friend's life. I can't wait for Jill Balko's reaction when she finds out she can't rhinestone her orange jumpsuit. Hope she enjoys her cold, hard time. I only feel a little bad for their kids who used to be friends with my friend. I hope they don't end up in foster care...
Anonymous

Minneapolis, MN

#370 Apr 18, 2008
I can't believe you'd say that, you dispicable jerk! Balko ruined my best friend's life. I can't wait for Jill Balko's reaction when she finds out she can't rhinestone her orange jumpsuit. Hope she enjoys her cold, hard time. I only feel a little bad for their kids who used to be friends with my friend. I hope they don't end up in foster care...
Anonymous

Minneapolis, MN

#371 Apr 19, 2008
You know Jill will lose the house. How can a former pom pom girl working at Dancer's Edge qualify for a mortgage. A 300,000 plus mortgage. Oh wait, her husband did the appraisal and Jon Helgason did the loan. Jill you fat cow, you are going to lose that home. I'll will do everything I can to make sure that loan is looked into.
amazed

Minneapolis, MN

#372 Apr 19, 2008
I can't believe how bitter you people are. Move on, get over it, start over and put it behind you. Ask yourself what good it does you to dwell on such things, you feel better?, it doesn't sound like it.

To Preacher: Let he who is without sin cast the first stone.

or

remove the plank from your own eye before the splinter from another.

or even

a fool claims to walk the righteous path when he truely walks to serve his own purposes.
Advocate

United States

#373 Apr 19, 2008
How dare you say how these people should feel? If people were not upset by crimes against them all criminals and bad people would just continue to get away with bad/criminal behavior. Why should people just move before justice is served?

The people will feel better when they are rightly behind bars.

P.S. The Preach ROCKS!
Johnny Northside

Minneapolis, MN

#374 Apr 19, 2008
Look, WORD ON THE STREET is the information in the Star Tribune article is grossly inaccurate. The former TJ Waconia properties are all REO bank-owned, according to what I'm hearing. These 140 or so properties DID NOT just fall into the hands of the city, and it may be politicians are trying to make hay from this, but I'm hearing the info is NOT ACCURATE and Minneapolis DID NOT just get its hands on 140 houses.
I can't confirm this info, but I'm hearing it in a serious way. Does anybody else know? What is the true situation, here?
rhinestones for roxy

AOL

#375 Apr 19, 2008
Well kids, looks like things are looking up for our resident cons. They can plan for their future now---which cell mate is cutest, how to spend free time in the yard and should I work in making license plates or laundry. And, the wives---lifes gonna get a little more squishy and saggy without all that barbie surgery and BOTOX. They will be able to show their emotions again! What a great time for that.

Karma sure has a sense of humor. Now---how do I mail rhinestones to prison? I know Jill will consider that mandatory to breathing. Even though she is TOTALLY innocent and NEVER owned or had anything to do with Dancer's Edge......right!!! Pigs are flying tonight baby!
anonymous

Minneapolis, MN

#376 Apr 20, 2008
The Balkos are such trailer trash. It is inbred. And I love how now that they are going to prison we are told not to be bitter. Hey guys, it is what it is. NOT. It's the best in the world. Now you get to be with your own kind. All those years of faking it, now you're going to be making it. This is the best weekend, EVER.

Let's make sure the government, IRS, whoever is aware of Jill's new home. Again a pom pom whore cannot afford that home. Legally anyway.
Legal Eagle

Saint Paul, MN

#377 Apr 20, 2008
Johnny Northside wrote:
Look, WORD ON THE STREET is the information in the Star Tribune article is grossly inaccurate. The former TJ Waconia properties are all REO bank-owned, according to what I'm hearing. These 140 or so properties DID NOT just fall into the hands of the city, and it may be politicians are trying to make hay from this, but I'm hearing the info is NOT ACCURATE and Minneapolis DID NOT just get its hands on 140 houses.

I can't confirm this info, but I'm hearing it in a serious way. Does anybody else know? What is the true situation, here?
What you have heard is CORRECT "grossly inaccurate" is minimal at best.
la la la

Minneapolis, MN

#378 Apr 21, 2008
i have known this couple for many years. first of all, Jill knew absolutely nothing about Tom's TJ companies and the way he and John may have done business. She didnt understand it, she didnt care. Maybe, that is the reason they got a divorce. Just because she wasnt happy anymore, doesnt make her a slut- She did anything and everything for that studio, thier children and all the kids attending. Although, it is cruel to leave all those kids without a studio, the studio was the one thing they loved! thier 3 children attended. Anybody who was at that studio knew that Jill was there constantly reassuring everythign was running smoothly.
anon

Houston, TX

#379 Apr 21, 2008
This is far from over for Balkie and Helgie... The article hints there are other federal (including IRS) investigations in motion. Also, let us not forget the fresh-brewed civil cases a-comin'...
It would be nice to see other mortgage fraudsters (Such as Wendy Sullivan, Riccardo Blevins, Sunday & Yemi Olateju and others) who've cancer'd the Northside (and all sides of the twin cities for that matter) get squarly put the in crosshairs...
I slept so good last night at least knowing that Balko and Helgason are GUILTY AS CHARGED and will be doing time for their crimes!
wrong

Minneapolis, MN

#380 Apr 21, 2008
Jill knew exactly what was going on. She worked with Tom in the basement in his appraisal company. Plausible deniability will not work Jill. Jill is not as stupid as Tom, close but she absolutely knew. She was just smart enough to bail before it really hit the fan.
Stupid or Dumb or Smart

AOL

#381 Apr 21, 2008
Here is an observation:

IF (notice the word "IF"), these awful villians are really as dumb as some here have said they are... What does that say about you, the victims? Think about it... Would you rather go on record saying you were victimized by someone smart or that you were taken advantage of by morons?
Dance Mom

Anoka, MN

#382 Apr 21, 2008
Hey lalala if you know Jill so well why are you saying they are divorced???? They are still very much married!! Keeps them from testifing against each other!! How romantic!!
la la la

Minneapolis, MN

#383 Apr 21, 2008
i guess.. cant say im suprised

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