Mortgage fraud scheme nets Las Vegas home builder 14-year sentence

Las Vegas homebuilder Paul Wagner was sentenced to 14 years in prison Monday in an $18.4 million mortgage fraud scheme, one of the largest in Nevada.

After a 12-day trial in October, a jury found Wagner, 59, guilty of a dozen conspiracy, bank fraud and wire fraud charges.

Before U.S. marshals could take him into custody after his conviction, Wagner tried to flee the courtroom. He jumped over a couple of rows of seats but was caught before he made it to the doors.

Nevada U.S. Attorney Daniel Bogden said at the time that Wagner was the first homebuilder to be prosecuted and convicted of mortgage fraud offenses.

On Monday, U.S. District Judge Miranda Du also ordered Wagner, a self-styled Christian minister, to pay $4.4 million in restitution with other defendants in the scheme and serve five years of supervised release after he gets out of prison.

Du said Wagner, who has been in federal custody since his courtroom escape attempt, and his co-conspirators in the mortgage industry had harmed the Las Vegas community with the scheme, which occurred between 2007 and 2009.

Wagner, who described himself as a born-again Christian, begged the judge for mercy and forgiveness but did not show remorse or accept responsibility for his actions.

“I did not have intent in my heart to commit a crime,” he said in his rambling remarks, sometimes looking at his supporters in the courtroom gallery. “I was just blinded by people. I trust everybody.”

Wagner and his lawyer, Mitchell Posin, also presented the homebuilder’s wife and several other speakers, who called him a generous and compassionate man devoted to Christian values.

“My husband is a phenomenal man,” a weeping Monica Wagner said. “He puts everybody above himself first.”

For the past decade, Wagner had built homes in the northwest part of the valley.

In a pre-sentence memorandum, Assistant U.S. Attorney Daniel Schiess said Wagner pulled off one of the largest mortgage fraud schemes in Nevada, involving more than 85 homes and costing lenders the $18.4 million.

Schiess wanted Wagner to spend 17½ years behind bars.

“Wagner’s conduct was egregious.” Schiess wrote. “He set up the scheme, which attracted people willing to engage in fraud.

“By offering huge cash back incentives, he chummed the waters for predators who were willing to take the bait. He knew these predators would use straw buyers to grab the cash. Just as these predators were motivated by greed, so was Wagner.”

Posin countered in court papers that Wagner was not a greedy man.

He described Wagner as a “productive” community member who donated hundreds of thousands of dollars to charity and ran a hospital ministry.

As a leader of his church, Holy Ghost Ministries, Wagner ran several charitable programs to aid the homeless, particularly needy veterans, Posin wrote.

“A greedy man does not take time out of his day to help the sick and feed the poor,” he said.

Federal prosecutors, however, uncovered a different side to Wagner.

They said he created a scheme to provide large cash incentives to buyers, real estate agents and others to sell his homes.

To pay for the incentives, Wagner inflated the value of the homes 100 percent through false appraisals and then concealed the incentives from the lenders, prosecutors said.

Many of the homes went into foreclosure after Wagner stopped making the mortgage payments.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Follow @JGermanRJ on Twitter.