SPRINGFIELD, Mo. -- The co-owner and president of a closed real estate company that defrauded dozens of residents of new homes and investors in those homes pleaded guilty in Greene County Circuit Court on Tuesday. Scott Dasal’s admissions follow his guilty plea for bank fraud in U.S. District Court last week.
Dasal was a co-owner of Greenleaf Companies and its subsidiaries, including The Real Estate Company. From 2006 through May 2008, the companies advertised heavily in southwest Missouri that they could get people with bad credit records into new homes. They also sponsored seminars for potential investors in which company officers outlined a scheme for people to invest in mortgages on homes that would be occupied by other people.
Under the plea agreement with the Missouri Attorney General’s Office, Dasal will receive five-year prison sentences on six counts of securities fraud and four-year sentences on four counts of unlawful merchandising practices. The charges were in an indictment handed up by a Greene County grand jury in 2011.
The Attorney General’s Office says Dasal will not be able to get probation, but all nine prison sentences will run concurrently and will run concurrently with whatever federal prison sentence he gets. Dasal also has to help federal investigators with their possible prosecutions of others who were involved in Greenleaf’s scheme. His sentencing hearing is scheduled for Aug. 15.
Under terms of Dasal’s plea agreement with the U.S. attorney’s office, he likely will get a three-year federal prison sentence. Investigators say the scheme was fraudulent and deceived a bank that held the mortgages by disguising the source of the money paid to the bank.
Investigators said Greenleaf took the residents’ payments but the money wasn't always paid to the banks. The mortgages were held by investors that Greenleaf drew into its scheme. Residents found out the mortgages were in default when they started getting eviction letters from the banks.
The Attorney General's Office sued the companies and its officers and got a civil judgment against the companies in late 2010. The judgment required the companies to pay $308,000 in restitution to the consumers who thought they were buying homes. How much of that restitution has been paid is not available through online court records. The civil cases against the officers continues, however, as the state tries to recover money to help their defrauded customers.
In the U.S. District Court plea agreement, Dasal waived indictment by a federal grand jury and agreed to be charged by a U.S. prosecutor’s information. He then pleaded guilty on the same day. In return for the guilty plea, the U.S. attorney’s office agreed not to file any more charges against Dasal related to the bank fraud.
Under federal law, Dasal could get a prison sentence as long as 30 years and a fine up to $1 million. Under the plea agreement, if a federal judge agrees, he’ll get a prison sentence of 36 months, an order to make restitution, and five years of supervised release, or parole. The amount of the restitution hasn't been set.
Assistant U.S. Attorney Patrick Carney said Friday that several banks were defrauded by Greenleaf but Flagstar Bank, based in Minneapolis, Minn., provided the majority of the mortgages that turned out to be fraudulent. Carney said the other banks have either gone out of business or were merged into other banks.
Carney said Flagstar wrote about $9 million worth of loans, through 42 mortgage applications, and lost about $3 million on those loans.
People who moved into Greenleaf's homes and thought they were making mortgage payments likely will get no restitution from Dasal and his companies from the federal court plea agreement, which only relates to defrauding the bank, not the homes' residents.
The Greene County grand jury indicted Dasal on 19 charges: 10 charges of fraud and nine charges of unlawful merchandising practices. In the 26 months since then, the case was proceeding towards a two-week trial that was postponed a couple times but was then set to begin last week, according to online court records. Last week, that trial was canceled and a plea hearing was scheduled, which resulted in Dasal’s guilty pleas on Tuesday morning.
When Dasal was indicted, the grand jury also indicted four other people on similar charges. They are Eric Gagnepain of Springfield, a former part-owner of Greenleaf; Misty Perkins of Highlandville, former director of Investor Relations for Greenleaf; William Strong of Springfield, former vice president of finance and daily operations for Greenleaf, and Robert Batchman, former real estate broker for The Real Estate Company.
Gagnepain pleaded guilty to the state charges in March 2012 but has not been sentenced because he subsequently filed a motion to withdraw his guilty plea.
A Greene County judge convicted Strong last August and sentenced him to five years of probation, and ordered him to pay $25,000 in restitution; less than $1,000 of that restitution has been paid.
Perkins is scheduled for trial in August.
Batchman was tried last month by Greene County Circuit Judge Tom Mountjoy, who has not issued a verdict.
The U.S. Attorney's Office has also filed mortgage fraud charges against Scott Jeffries and Justin Jeffries, who ran a company called Ozark National Mortgage. That company acted as the mortgage broker that obtained loans at the defrauded banks for the investors in Greenleaf's scheme. Their charges are for defrauding the U.S. Department of Housing and Urban Development (HUD), which guaranteed some or all of the fraudulent mortgages. The Jeffries brothers, who are cooperating with federal investigators, are scheduled for a trial in U.S. District Court in Springfield in July.
Carney, the assistant U.S. attorney, couldn't say whether Gagnepain, Strong, Perkins and Batchman might face federal charges.