DENVER — Colorado Attorney General John Suthers announced today that attorneys from the office’s Criminal Justice Section have secured an indictment from the Statewide Grand Jury against five Coloradans accused of using their Lafayette-based business entities to defraud commercial lenders from Colorado and Arizona.
“Even though this case is a twist on the classic Ponzi or mortgage-fraud scheme, it nonetheless disrupted the lending markets, resulting in fewer loans being available to legitimate homebuyers in Colorado and throughout the region,” Suthers said. “This case should underline my office’s commitment to vigorously pursuing and prosecuting mortgage and lending fraud throughout Colorado.”
According to the 40-count indictment, John Reinholdt II (DOB: 1/10/1972), Heather Cratty (DOB: 8/12/1976), Raina Martin (DOB: 12/25/1975), Mary Ann Hocker (DOB: 6/10/1943) and Jon Michael (DOB: 7/7/1965) used at least 19 businesses, including the Jaguar Group LLC, to obtain loans from so-called “warehouse” lenders at interest rates between 5 percent and 7 percent. The defendants used the capital to make subprime loans with interest rates of at least 11.5 percent to consumers.
According to the indictment, the defendants’ business operation appears to have been legal up until around 2006 when their operation’s income became less reliable. From then on, the defendants are suspected of using the new capital raised from warehouse lenders, based on paperwork from nonexistent “straw” homebuyers, to pay back interest on prior loans. The defendants also are suspected of “resurrecting” properties in which they no longer had any legal or financial interest via forged documents to obtain lending capital.
Investigators from the Office of the Attorney General partnered with the Federal Bureau of Investigation to obtain the indictment against Reinholdt, Cratty, Martin, Hocker and Michael. Prosecutors from the Office of the Attorney General will prosecute the defendants in Denver District Court.