A 49-year-old Prior Lake man was indicted Tuesday in U.S. District Court in Minneapolis on four charges related to mortgage fraud.

Ronald Clark Joseph was charged with two counts of mail fraud, one count of wire fraud and one count of money laundering in connection to a scheme to defraud mortgage lenders out of millions of dollars, according to the U.S. Attorney’s Office.

The indictment states that through approximately 40 separate real-estate transactions Joseph was allegedly involved with, about $2.5 million in concealed payments were made.

Between 2004 and 2006, Joseph, a licensed mortgage broker who worked for LHS Inc., allegedly devised and implemented a scheme causing fraudulent loan applications to be provided to potential lenders.The applications allegedly misrepresented the terms of the proposed transactions, by, among other things, overstating property purchase prices.

After loans were approved, loan proceeds were provided to a title company.

According to the indictment, Joseph allegedly worked with a closing agent at the title company to disburse some of those proceeds inconsistent with the understanding of the lender. Payments from those proceeds were made to the property buyer and other third parties, as well as to Joseph.

In order to conceal the scheme, Joseph allegedly had false-settlement statements mailed to the lender.

Joseph allegedly participated in the fraud scheme as a property broker as well as a buyer and seller. Joseph and LHS Inc. allegedly received substantial fees for arranging the fraudulent transactions.

The indictment states that on at least two separate occasions, Joseph personally purchased property and subsequently received nearly $200,000 in concealed payments.

To execute the scheme, Joseph also allegedly had $369,329.56 wired from a mortgage account in New York to a title company account in Minnesota.

Joseph also allegedly used the proceeds of the fraud scheme to purchase a Cadillac with a check in the amount of $27,859.75 in January 2006.

If convicted, Joseph faces a maximum potential penalty of 20 years in prison on each mail-fraud and wire-fraud charge. He also faces a maximum penalty of 10 years in prison for money laundering.

Joseph’s indictment followed the recent plea agreement of Mario Augustin Lewis of Minneapolis, in a related case.

Lewis agreed to enter a guilty plea on charges of wire fraud and money laundering in connection with Joseph’s alleged scheme.

Lewis admitted to receiving nearly $400,000 in concealed payments between 2004 and 2006 through fraudulent real-estate transactions, according to the U.S. Attorney’s Office.

Lewis also admitted to owning and knowingly renting out a residence used for growing marijuana.

The maximum potential penalty for Lewis’ crimes are 20 years in prison for wire fraud, 10 years in prison for money laundering and 20 years in prison for maintaining a drug-involved premises.

— Shawn Hogendorf