Home builder convicted in $8 million scheme

A federal jury convicted Las Vegas homebuilder Paul Wagner on Friday in an $8 million mortgage fraud scheme.

After a 12-day trial, the 56-year-old owner of the now-defunct Wagner Homes was found guilty of conspiracy and fraud charges for selling houses at inflated prices in the scheme to defraud lenders.

U.S. District Judge Miranda Du ordered Wagner detained while he awaits his Jan. 14 sentencing.

Before U.S. marshals could take him into custody, Wagner tried to flee the courtroom. He jumped over a couple of rows of seats but stumbled and was caught.

"Over 140 persons have been convicted of mortgage fraud offenses in Nevada since 2008," Nevada U.S. Attorney Daniel Bogden said in a statement after the verdict. "Most of those persons are now serving time in federal prison. Mr. Wagner is the first homebuilder to be prosecuted and convicted."

Wagner was a homebuilder in Las Vegas for about 20 years, the last 10 of which he spent building tract homes in the northwest part of the valley, Bogden said.

From about 2007 to 2009, Wagner created a scheme to provide large cash incentives to buyers, real estate agents and others to sell his homes, prosecutors alleged in the case. He fraudulently sold about 78 homes in the scheme.

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

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

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Daniel Schiess.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.