Kurlemann was indicted in January along with scam artist Eric Duke, luxury home builder Bryan Sanneman and former Huntington National Bank vice president Terrence J. Monahan Jr. on the mortgage scan scheme, the bankruptcy charges were filed later and attached to the case.
Warren County Chief Assistant Prosecutor Bruce McGary, who served as a special federal prosecutor on the case, said the jury began deliberations at around 2:30 p.m. Tuesday and returned the verdicts just after 4 p.m. Wednesday. Federal prosecutor Jennifer Barry said Kurlemann will be sentenced on Feb. 9 and he could face up to 75 years in prison on all the counts, but that is not likely to be the punishment.
She said the task force effort between the Ohio Attorney General, Warren County and her office helped seal the conviction.
“We had the collaborative effort of the task force to investigate this thoroughly,” she said. “The sellers think they have no risk, because the whole point for Mr. Kurlemann was to walk away from the debt on these two properties. If the scheme successful, the loan is with the person who borrowed the money. The seller is gone... The focus has never really been on how that part of the transaction is involved. But every transaction when it comes to mortgage fraud is two sided, it’s a seller and a buyer. We have shown with these kinds of schemes we have to get all parties involved.”
Kurlemann’s attorney could not be reached for comment.
Kurlemann, Duke, Sanneman and Monahan all entered pleas of not guilty but Kurlemann’s co-defendants later changed their pleas to guilty to the various loan and wire fraud charges. Two “straw buyers,” Francisca Webster and Christopher Gagnon, were charged separately and also pleaded guilty for their part in the scheme to buy three homes in Long Cove in Deerfield Twp. and one home in River’s Bend in South Lebanon.
Webster, of Cincinnati, sued Duke in Hamilton County Common Pleas Court in 2006, claiming as her friend and tax adviser, he tricked her into buying two Long Cove homes and one in River’s Bend.
She said Duke told her she could get out of approximately $70,000 in debt if she loaned him her good credit by “buying” the houses, two of which had been Homearama show houses in Long Cove. He promised to re-sell the homes in three months, the lawsuit claimed.
Duke later sold one of the houses on a land contract, which wasn’t his to sell. Webster is still listed as the owner on the county auditor’s website.
Webster’s civil case was eventually dismissed by the court.
Gagnon bought a mansion on Emerald Isle. His loan application stated he earned $61,500 a month and put down $280,000 in earnest money that was never actually paid to Kurlemann.
U.S. Attorney Carter Stewart said when the men were indicted that in one of the transactions Kurlemann allegedly gave the down payment to Duke to give to the “straw purchaser,” who then gave it back to Kurlemann. Sanneman also allegedly said he received down payments he didn’t.
The idea behind the scheme, according to prosecutors, was to get the $1 million-plus homes sold, then turn around and flip them for a higher price. The plan backfired when the houses didn’t sell.
The superseding grand jury indictment on the bankruptcy charges stated that Kurlemann was staring down more than $20 million in short term debt in 2006 and more than $26 million in 2007, when he allegedly agreed to participate in the scheme concocted by Duke.
The government linked the mortgage scam to Kurlemann’s bankruptcy claims. John and Connie Musuraca filed suit against Kurlemann in 2005 after they claimed he refused to fixed serious problems with their Heritage Club home in Mason. Kurlemann has always maintained he offered to fix the problems, but the couple chose the courts rather than compromise.
He ended up losing the lawsuit and was on the hook for $1.4 following a verdict in October 2007. The final judgment ended up being $1.15 million after the judge reduced the amount slightly.
The Musuraca’s attorney claimed Kurlemann broke up his company into separate entities and filed bankruptcy on one, to avoid paying the judgment. The bankruptcy indictment didn’t address this claim, but stated Kurlemann made a questionable property transfer to keep assets out of the bankruptcy.
Contact this reporter at (513) 696-4525 or dcallahan@coxohio.com.
About the Author