Jurors find Tepoel guilty of fraudMADISON — A Duluth mortgage broker was found guilty Thursday in federal court of conspiring to defraud about 20 investors out of $2.5 million.
By: By KEVIN MURPHY/Special to the Daily Telegram, The Daily Telegram
MADISON — A Duluth mortgage broker was found guilty Thursday in federal court of conspiring to defraud about 20 investors out of $2.5 million.
After a three-day trial, federal jurors deliberated about six hours before finding Daniel Tepoel, 55, of Barnes guilty on fours counts of mail fraud, two counts of wire fraud, and single count of making false statement to a FBI agent and conspiracy to commit mail fraud.
District Judge Barbara Crabb found Tepoel to be a flight risk and ordered him into immediate custody pending his June 4 sentencing. Assistant U.S. Attorney John Vaudreuil sought Tepoel’s detention based on co-defendant Gary Milosevich’s disappearance since before both men were indicted last April on the fraud charges.
“(Tepoel) would lie about anything to gain an advantage,” Vaudreuil said quoting Crabb who could sentence Tepoel up to 12 years in prison under federal guidelines.
At trial, Vaudreuil called several witnesses who said Milosevich began contacting them in 1997 them about investing in bank debentures, investments that would earn up to 120 percent interest annually at no risk to their principle.
The fund solicitation continued through 2001 by which time the government believes about 20 investors had been scammed out of $2.5 million, said Vaudreuil.
The bank debentures never existed, Vaudreuil said. Instead the investors’ cash was first deposited in the Republic Bank of Duluth, then, what funds Tepoel or Milosevich didn’t spend locally, were transferred to a bank account in Grenada controlled by Milosevich and Tepoel.
Funds transferred to Rainbow Management’s bank account in Grenada were used by Milosevich to purchase a condominium project on the Caribbean island, according to Vaudreuil.
Checks cashed by Tepoel totaled about $580,000, Vaudreuil said.
When the large promised dividends weren’t forthcoming, Milosevich began lying to investors during phone calls that financial records of their transactions were destroyed in the Sept. 11, 2001 attacks in New York, or that the government had stolen their money, Vaudreuil said.
“During one (recorded) 20-minute phone from Superior to Grenada, Milosevich gave four different versions of what happened to the money,” Vaudreuil said.
The investors initially were told to keep their investments confidential so the rest of the market wouldn’t learn about the supposedly high-yield offerings. When government investigators became suspicious about Tepoel’s and Milosevich’s scam, the defendants told the investors not to cooperate with the investigators or risk losing their money, Vaudreuil.
Tepoel had three attorneys appointed during the past 11 months in preparation for trial, but represented himself when Crabb refused to appoint a fourth attorney for him.
At trial Tepoel called four witnesses and took the stand to testify that he Milosevich acted alone, for much of the dealings with the investors or Tepoel merely did what Milosevich told him to do, Vaudreuil said.
“The jury obviously didn’t buy that,” said Vaudreuil. “We said this was a case about lying to get the money and then lying to stall or calm the investors and delay the investigation.”