Duluth mortgage broker faces federal trial for fraud

MADISON — A Duluth mortgage broker took “hundreds of thousands” of dollars from “many, many” people in the Twin Ports falsely promising them “no-risk” returns of at least 120 percent a year, a federal prosecutor told jurors Monday.

Of course it was too good to be true and it ended several years later with most of the investors losing their money, and Daniel Tepoel, 55, of Barnes, facing charges of mail and wire fraud conspiracy, and making false statements to the FBI, Assistant U.S. Attorney John Vaudreuil said at the beginning of Tepoel’s trial.

“This is a case about lies. Lies told (to investors) to get the money. Lies told to stall them from going to the FBI and lies to the FBI to throw off the investigation,” Vaudreuil said.

One investor, Superior hair stylist Bruce Carignan, testified that he gave Tepoel’s co-conspirator, Gary Milosevich $20,000 in cash in late 1999 to invest in the World Bank. Carignan told the court that Milosevich said the money would never leave the country and would earn 120 percent during the next year.

Carignan received three quarterly statements by mail in 2000 purportedly showing his $20,000 investment was progressively worth $31,406, $38,720 and $45,980. Asked by Assistant U.S. Attorney John Vaudreuil how he felt about his investment, Carignan said, “good”, but the statements, “didn’t look professional,” as the math wasn’t calculated right.

The interest earned wasn’t the only thing that didn’t add up, Carignan said. By the end of 2000, he was supposed to get a card that would allow him to withdraw his funds but he never got the card. When he phoned Milosevich on the Caribbean island of Grenada, Milosevich said Carignan told him he would get his money within months.

However, Carignan testified he “never got a dime.”

Vaudreuil said Carignan’s story will be repeated by other defrauded investors during the weeklong trial. Tepoel and Milosevich promised safe, high-yield returns but instead the money was deposited in the Republic Bank of Duluth, and withdrawn to purchase a condominium project in Grenada and spent on personal expenses including Tepoel’s gas bill and on car repairs at Mags Auto Service.

Milosevich, formerly of Superior, and Tepoel were indicted in April 2007, but the authorities have been unable to locate Milosevich.

During the yearlong preparation for trial, Tepoel went through three court appointed attorneys before District Judge Barbara Crabb refused this month to appoint a fourth. Tepoel has Sarah Schmeiser, as standby counsel, but he is representing himself at trial.

In his opening statement, Tepoel said he did “nothing wrong or illegal.” He didn’t solicit investors, Milosevich did and only deposited money in the Republic Bank and wrote checks at Milosevich’s request, Tepoel said.

“Gary offered me one-third ownership in the (Grenada) resort for helping him,” Tepoel said.

Vaudreuil said Tepoel and Milosevich told prospective investors about bank debentures and ‘T-Bill trading programs,” that financial experts will testify never existed. The investment agreements Carignan and others signed required confidentiality, which allowed Tepoel and Milosevich to keep secret their fraudulent schemes from 1997 to March 2007, said Vaudreuil. When investors finally went to the FBI and an agent contact Tepoel, Tepoel lied about his involvement in the scheme, Vaudreuil said.

Tags: mortgage, money, investors, trial, investigation, carignan, cash, tepoel