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3 sentenced for $4.5M construction loan scheme

By Celeste Tholen Rosenlof | Posted - Jan 4th, 2013 @ 5:06pm

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SALT LAKE CITY — Three men were found guilty in connection with a 2007 construction fraud scheme that stole nearly $4.5 million from a father and son partnership.

Mauricio R. Munoz, 49, of Sandy, plead guilty to wire fraud and money laundering and will serve 41 months in prison, as well as pay nearly $3 million in restitution.

Another man, Justin Hatton, 40, was indicted separately in connection with the scheme and has not been tried.

Munoz, Hutton and two other men, Daniel Alfonso Blanco, 41, and Michael Russell Held, 48, were found guilty of scheming a father and son partnership into making bridge loans of $4,414,389 in order to buy five properties in the Promontory Ranch Club development near Park City.

The men convinced the father and son using falsified paperwork and misrepresentations that the lots were valued between $1.25 million and $1.8 million and that buyers had made down payments on the properties — supposedly worth twice the amount of the bridge loans — which served as loan security.

They claimed construction loans and long-term financing would replace the bridge loans and that the construction loans would end the father and son's involvement in less than two months.

The funds were secured by lots worth less than half the loan, and the construction loan was never obtained. According to a witness, Blanco created two versions of the closing documents. One reflected the true closing and diversion of excess loan proceeds, while a false set was designed to convince the bridge loan lenders the process had gone through as promised.

According to the Department of Justice, Munoz laundered $600,000 through his mother's bank account, which was then divided between himself and Hutton. Blanco received $10,000, the department said. Held was paid no more than $300 for forging contracts and documents, the court determined.

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