Greenleaf VP convicted for role in real estate scheme

William Strong, former vice president of finance and daily operations for Greenleaf Cos. LLC, was convicted today for his role in a real estate investment scheme by Greenleaf and The Real Estate Co.

Strong was charged with one count of securities fraud and five counts of unlawful merchandising practices, according to a news release from Missouri Attorney General Chris Koster's office.

Through the scheme orchestrated by Strong and other Greenleaf officers, Greenleaf convinced investors to purchase homes with the promise the company would pay the down payment, closing costs and monthly mortgage payments. Greenleaf had promised to purchase the homes from the investors and pay a $10,000 bonus at the end of several years.

According to the release, The Real Estate Co. contracted to sell the homes, which were actually owned by the investors and not Greenleaf, to buyers in the subprime market without informing the investors they actually owned the homes being sold. After Greenleaf stopped paying investors their monthly mortgage payments, some investors were unable to make the payments themselves, and banks began foreclosing on the homes even after some buyers had paid Greenleaf.

Trial evidence showed that Strong:

• misrepresented the creditworthiness of buyers to investors;
• purposefully failed to advise buyers that the homes were owned by Greenleaf and not the investors;
• failed to advise buyers that Greenleaf wasn't making timely payments to investors; and
• promised a deed of trust to a buyer when Greenleaf didn't own the property it was selling.

Two other officers, Lane Sanders and Eric Gagnepain, have pleaded guilty to their roles in the real estate scheme. Charges against three other officers - Scott Dasal, Misty May Perkins and Robert Batchman - are pending, according to the release.

Each charge of securities fraud carries a maximum potential sentence of 10 years incarceration and a $1 million fine. Each charge of unlawful merchandising practices carries a maximum potential sentence of four years behind bars and a $5,000 fine.