ALBERTA

Alberta Court of Appeal orders mortgage fraudster to serve more jail time

02/07/2013 03:13 EST | Updated 04/09/2013 05:12 EDT
EDMONTON - An Alberta man who bilked companies of almost $4 million in a mortgage fraud scheme has been ordered to serve more jail time.

James Steinhubl was convicted of 14 fraud charges in 2010 and was sentenced in February 2011 to 42 months in jail.

He was acquitted on another 15 fraud charges.

The Alberta Court of Appeal has overturned those acquittals and increased his overall sentence to six years in jail.

Steinhubl, who is 49, has also been ordered to pay more than $1.1 million in restitution to banks, the Law Society of Alberta and the GE Capital Mortgage Insurance Corporation.

Court documents say Steinhubl sold homes to people in Warburg and Empress in the late 1990s who were unable to qualify for mortgages by paying others who did qualify to obtain the financing.

"The scheme here was very long and carefully planned," reads the judgment filed by a panel of three judges.

"The accused inveigled many dupes into acting as fronts for the criminals, in return for small payments. They had enough guilt that they would not complain, but they did not realize the serious financial risk that entailed."

These "straw buyers" were paid $5,000 each for their participation and would then transfer the mortgages to the people who couldn't qualify.

Steinhubl, of Sherwood Park, was out on parole after serving 11 months of his original sentence and must now return to jail.

The appeal court notes that he has so far not paid any restitution to the lenders or their insurers, the "straw buyers" or the law society, which paid out large sums from its insurance fund.

"The accused has been ordered to make restitution on the original fraud convictions, but he is unlikely to pay much of that, even if he tries."

Documents that Steinhubl filed with the appeal court say he is a reformed man and now works as a telemarketer.

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