Julia Rozhansky and Zack Dyab, two of the principals in the Danna D III corporation and American Choice Lending, pleaded guilty to mortgage fraud in federal court this week. Danna D was a series of LLC's (roman numerals I - VI were also used for properties at various locations, although most NoMi houses were under the III entity), and Rozhansky and Dyab had planned to buy "hundreds of rental properties in north Minneapolis," according to an MPR report that broke the story of their criminal activities. Through wire fraud and mortgage fraud, they stiffed investors of over $2.5 million and caused more than two dozen foreclosures in north Minneapolis alone.
This is a pattern we've unfortunately seen all too often; predatory investors coming in and buying properties on the cheap, using fraudulent means to qualify, not pulling proper permits, doing substandard (if any) maintenance, and ultimately losing scores of homes to foreclosure when the house of cards collapses under its own weight of malfeasance. At least we're seeing some of these crooks finally get jail time, but the impact on our community will likely outlast their prison terms.
And when fraud is committed at one of these properties, it's not just a one-time occurrence. The neglect of a property often makes it unappealing to anyone but the next predatory investor. Or the first fraudster wants to sell at an over-inflated price, and the only ones qualifying for something at that level are the ones committing the next round of slumlording mortgage fraud. That is exactly what happened with one of the properties listed in the indictment (the plea agreement isn't available online yet, but I will publish it once it is, and the sentencing hasn't been scheduled).
1417 Logan Avenue North was owned first by Danna D III, and then...
