A Bettendorf attorney’s mortgage fraud trial in U.S. District Court, Davenport, ended in a hung jury Wednesday afternoon.
Paul Bieber was accused of defrauding lenders in a series of real estate transactions in 2005. His trial began June 6, and after several days of testimony and lawyers’ closing arguments, the case was handed to the jury Tuesday morning.
They couldn’t reach a decision by 3:30 p.m. Wednesday. The case has been set for a retrial Aug. 4, Kevin VanderSchel of the U.S. Attorney's Office said.
Neither prosecutor Don Allegro nor defense attorney Mark Pennington could be reached for comment.
Bieber is charged with conspiracy and wire fraud, accused of helping to facilitate the closings on at least five bogus loans for property, mostly in Davenport’s Americana Park neighborhood, now called Goose Creek Heights.
To get the loans, the government says, Bieber and a mortgage broker, Winnifer Elvidge, falsely represented to each lender that the sale price of the property was the inflated price set in the contract, concealed the existence of the lower actual price stated in the addendum and failed to disclose the post-closing kickback paid by each seller to each buyer.
Bieber testified Monday that he assumed the lenders were aware of the higher prices, that he never communicated directly with the lenders and that he thought the difference given to the buyers was going toward renovations.
As part of his defense, Bieber insisted he received “absolutely nothing” from the transactions outside of normal fees as the lawyer representing the seller at each of the closings.
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Others charged in the fraud include:
The mortgage broker: The government claims that from June 2005 through July 27, 2006, Elvidge identified financially unqualified buyers to purchase real property, provided falsified documentation in support of mortgage applications by the buyers and obtained appraisals that grossly inflated the values of properties. The government claims she then caused sellers of real property to agree to sell their properties at the inflated prices so larger mortgage loans would be granted from unwitting mortgage lenders and banks. She awaits trial on conspiracy, wire and bank fraud charges.
The real estate agent: The government said that Mary Pat Harper strong-armed buyers and sellers into closing on properties by threatening to sue them and collected unearned fees and commissions. She has pleaded guilty to wire fraud charges.
The buyers: Robert Herdrich and Darryl Hanneken became interested in real estate investment based on infomercials touting the use of “creative financing.” Lacking the income to qualify for the mortgages for which they applied, they falsified their income on loan applications and agreed to conceal kickback agreements from the lenders. Each has pleaded guilty to bank and wire fraud.