Strodtman jurors get a mortgage lesson on Day 1

Nov 05, 2009 (Greeley Tribune - McClatchy-Tribune Information Services via COMTEX) -- CUFF | Quote | Chart | News | PowerRating -- A Weld District Court jury charged with determining whether a Greeley builder committed forgery and theft in a pattern of racketeering three years ago was left with two different impressions of the man Wednesday morning to kick off his three-week trial.

Mark Strodtman, 52, is on trial for 11 counts of felony theft, 11 counts of forgery and one count of racketeering under the Colorado Organized Crime Control Act. His trial officially began Wednesday with opening statements, then continued throughout the day with one witness educating the jury on different types of mortgage products and how they work, an education that will continue this morning.

Strodtman is accused of creating an elaborate kickback scheme to sell houses through his company, which he started in 2004 with Dean Juhl, who also was an employee and banker with New Frontier Bank. Prosecutors say Strodtman falsified closing documents on the sales of 11 homes by not disclosing thousands of dollars in kickbacks he was giving to homebuyers as incentives to buy the homes.

Defense attorney David Kaplan of Denver painted a picture of a Greeley builder who just wanted to build houses and get in on a hot real estate market. Strodtman, he said, relied on others' expertise in the mortgage and closing documents, which he had little to do with other than to sell the home to a buyer.

"He didn't do it alone, he just concentrated on his part of the business," Kaplan said, "which was getting the houses built, showing them to people who were interested in purchasing them then entering into contracts ... so that person could buy the house. All the other people it takes for that sale to be completed, in that opening, it seemed like everyone else in that sale (were) minimal participants. ... It cannot be understated how much reliance is placed on the expertise of the mortgage broker by the seller."

Kaplan called the money Strodtman paid to the buyers "referral fees," which had nothing to do with the contacts or sales of the homes.

Deputy District Attorney Matthew Pring said the kickbacks were distributed to several players, many of whom were originally charged in the scheme but whose cases were dismissed in exchange for testifying at trial against Strodtman. The kickbacks, had they been disclosed, would have been legal, Pring said. But that also likely would have kept lenders from funding the loans in the first place.

"If they don't know, they can't properly evaluate their risk," Pring said. "They'll take that incentive and look at it and figure if they want to loan the money, but they have to know. In this case, it was hidden, and that's what makes it illegal. It was hidden, handshake deal, and lenders were deceived."

Pring explained that there were slightly different kickback schemes on the sale of 11 houses, six of which were to New York investors, relationships that were created through the uncle of Strodtman's mortgage broker, Jessica Feliciano-Brandt. Upon the completion of those sales, Pring said, they all got together for a dinner and a baseball game, after which buyers walked away with $10,000 for each home sold.

"He did all this as part of JS Real Estate, his company, using other shams, other ways to route money around to hide them from the person they were trying to deceive," Pring said. "Without the lender, there's no money. Without money, the defendant doesn't make any. That is deception and greed, trying to sell houses at the highest rate as fast as possible."

The home sales in question took place in 2005 and 2006.

Juhl was charged and took a plea deal early in the process, but the jury will not be told about his deal in relation to this case. Weld District Court Judge Marcelo Kopcow said he wouldn't allow the prosecution to state Juhl took a plea deal based on the facts of Strodtman's case. Prosecutors can, however, tell the jury his deal had something to do with JS Real Estate.

Strodtman was originally indicted in the case by the Weld District Court Grand Jury in March 2008, but he was found last fall in Mexico. He's been in Weld County Jail ever since on a $12 million bond.

Before opening statements Wednesday, Kaplan asked for a change of venue, given the publicity that New Frontier Bank has received since it was closed in April. Strodtman had dealings indirectly with the bank, mostly through Juhl.

Changes of venue are sought when attorneys don't believe they can pick a jury that would give their clients a fair trial. Attorneys on both sides Tuesday afternoon accepted a jury of 14 people, skipping a couple of extra chances to get new jurors on the panel.

Kopcow denied the request, saying, "All 14 jurors can provide Mr. Strodtman a fair and expeditious trial based on their responses during jury selection. The court also finds even though there has been some pretrial publicity with regard to New Frontier Bank, which is indirectly associated with this case, the court is finding the existence of pretrial publicity is not massive, pervasive or prejudicial to the point where it requires the defendant to have change of venue."

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