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Man sentenced to 18 months for mortgage fraud

A Waukesha restaurant owner was sentenced Tuesday to 18 months in federal prison for his participation in a scheme to fraudulently obtain millions of dollars in construction loans for a condominium project.

Ackasone Virasith, who previously worked as a mortgage broker, inflated the qualifications of family members for whom he applied for mortgage loans to pay for the construction of five, two-unit buildings in Darien. Between November 2005 and January 2008, he illegally obtained more than $2.8 million in loans for the project. He defaulted on the loans when the project failed to make money.

Virasith, who is the owner of Pacific Bistro in Delafield, pleaded guilty in June to a single count of wire fraud, stemming from his faxing loan applications with fraudulent information.

During a sentencing hearing Tuesday morning, with a group of Virasith’s family members and supporters in the audience, Judge J.P. Stadtmueller ordered Virasith to report to prison on or before Nov. 3. The judge also sentenced Virasith to three years of supervised release after prison and ordered him to pay restitution to several financial institutions, an amount that is likely to top $1 million, though an exact amount has yet to be set.

A pre-sentence investigation report recommended Virasith serve between 33 and 41 months in prison. But a lesser sentence then was recommended, Assistant U.S. Attorney Carol Kraft told the judge, because Virasith cooperated with federal investigators as they built a case against an alleged co-conspirator.

That person has not been identified publicly or charged, though court records indicate Virasith worked on the condominium project with Richard Jinkins.

Stadtmueller said he took Virasith’s cooperation into consideration, but the judge still criticized the defendant for his part in the scheme, which Stadtmueller said was one designed as a shortcut to getting rich instead of doing it in “the old-fashioned way.”

“Sometimes the best cooks in the world or the best restaurateurs are the very poorest of financial managers,” Stadtmueller said. “And I think this is something that you personally have to think very, very long and hard about.”

State Department of Financial Institution records show Virasith also ran the now-closed Thai Gourmet restaurant in Kenosha. That business, and the $653,385.22 in taxes he allegedly didn’t pay while operating it, landed him on the state Department of Revenue’s top delinquent taxpayers list.

At the time of the illegal activity involving loans for the Darien project, Virasith worked as a mortgage broker for American Home Loans and Sage Credit Services, according to court documents. The now-defunct Creekside Builders Inc., owned by Jinkins, developed the project.

Even though the loans mostly were under family members’ names after they agreed to purchase condominiums with the promise that their ownership would be temporary, Virasith agreed to make all the mortgage payments. Later, he arranged for the buyers to receive money to close out their mortgage loans. Some of the money came from an investor who had been told by Virasith that the investment would “earn substantial returns.”

At first, Virasith made the payments, but he was unable to get the properties zoned for group-home occupancy, as planned, and the money ran out. In total, nearly $1.7 million was lost in the deal.

During Tuesday’s hearing, Virasith told the judge he was sorry for his participation in the scheme.

“It’s my fault,” he said, “and I’m taking responsibility for my actions.”

His attorney, Craig Mastantuono, tried to steer the judge toward handing down a sentence with no jail time. He characterized Virasith as a person who was greatly influenced by the yet-to-be-charged co-conspirator, and that Virasith has learned from his mistakes.

“I don’t think that Mr. Virasith fully understands how he could have done what he did,” Mastantuono said. “I know that meeting the person involved … in this scheme made an impact on him and that he was tempted by trying … [to] engage in a series of transactions that would take care of him and his family and put them into a higher level of lifestyle.”

Stadtmueller said “this is not a case for probation,” though, because of “just how serious this problem became, that led to many, many, many individuals losing all of their financial wealth.”

About Eric Heisig

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