MINNEAPOLIS (WCCO) – A 63-year-old Bloomington man who was the former vice president and chief financial officer for Centennial Mortgage and Funding Inc. was accused of frauding that company out of about $8 million in Minneapolis Federal Court on Thursday.
Joseph W. Traxler was charged with defrauding a bank through material omissions and misrepresentations concerning the company’s operations and mortgage loans entered by Centennial. He was charged with one count of aiding and abetting bank fraud.
From 2007 to 208, Traxler allegedly illegally used funds intended for mortgage loans to cover the company’s operating losses and to fund the company’s payroll and other expenses. When a home buyer applied to Centennial for a mortgage loan, the company requested advanced funding from one of the lines of credit it held with various banks.
Once the advance was approved, money was put into an account that Centennial used to make the mortgage loan to the buyer at the close of the transaction.
During the period in question, Traxler allegedly made misrepresentations to lenders about the status of existing mortgage loans to induce them to advance additional money, concealed from lenders existing mortgage loan defaults, concealed that he had secured double funding for 23 mortgage loans and wrote checks between Centennial’s accounts at different banks in an effort to falsely inflate account balances and allow checks to clear that would otherwise bounce.