Luxury home builder's trial for loan fraud begins Friday

Duke, Sanneman and Monahan have all since pleaded guilty to the various loan and wire fraud charges. Kurlemann, who now faces additional charges of bankruptcy fraud, concealment of assets and false oaths, will go before a jury on Friday. Jury selection began on Wednesday. The original charges include conspiracy to defraud the United States government and loan and credit application violations.

Two “straw buyers,” Francisca Webster and Christopher Gagnon, were charged separately and also plead 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 Web site.

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, when the men were indicted, said 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 alleged 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.

Kurlemann’s attorneys said they could not comment on the upcoming trial that is expected to last almost four weeks. Chief Assistant Warren County Prosecutor Bruce McGary, who is helping to prosecute the case, also said he couldn’t discuss the case.

Contact this reporter at (513) 696-4525 or dcallahan@coxohio.com.