A Waukesha restaurant owner who is on the list of the state’s top 100 delinquent taxpayers has agreed to plead guilty to wire fraud for his alleged role in a scheme to obtain construction loans.
Between November 2005 and January 2008, Ackasone Virasith illegally obtained more than $2.8 million for a condominium project in Darien, according to documents filed in federal court. He used the money to construct and maintain five, two-unit buildings, though he defaulted on the loans and the properties went through foreclosure.
In total, nearly $1.7 million was lost in the deal, according to a plea agreement that the Eastern District of Wisconsin’s clerk of court’s office entered into its system Monday.
The now-defunct Creekside Builders Inc. developed and built the buildings, and Virasith worked with Richard Jinkins, the company’s owner. Jinkins also was the owner of Castlerock Commercial Construction Inc., which closed in 2010 while on the hook for more than $3 million in unpaid commercial loans and other costs.
At the time of the alleged 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.
He is charged with a single count of wire fraud based on his faxing loan applications with fraudulent information from his office to nominee buyer “F.I.” in Cumming, Ga., according to court documents.
Virasith also owns Pacific Bistro, an Asian restaurant in Delafield. State Department of Financial Institution records show he also ran the now-closed Thai Gourmet restaurant in Kenosha. That company, and the $647,069.22 in taxes he allegedly didn’t pay while operating it, landed him on the state Department of Revenue’s top delinquent taxpayers list.
According to a criminal complaint and plea agreement, Virasith and Jinkins made plans in 2005 to construct the five buildings in Darien. The new buildings, along with one other two-unit building built on an adjacent property in 2004, were planned as a group home.
Virasith sought a loan from First National Bank & Trust to build the condominiums. However, according to the complaint, he lied to the bank, saying the 10 condominium units had been pre-sold and that a “specific individual intended to rent the units for the purpose of a group home living facility.”
According to the plea agreement, Virasith arranged to sell the already constructed building to a female family member identified as “L.V.” He told her that “her ownership would be temporary, that he would make the mortgage payments, and that the building would be repurchased from her within a few months,” according to the complaint. Virasith then applied for a loan on behalf of L.V. and received $380,000 from OWNIT Mortgage Co. by falsely inflating her borrower qualifications.
In 2007, after the buildings were completed, Virasith again arranged to sell a unit to L.V., as well as nine other units to four other buyers. The units sold for between $160,000 and $250,000, and Virasith again told the buyers the purchase need be only temporary and that he would make all of the payments, according to court documents.
He filed for loans on behalf of the buyers — all members of his family, according to the plea agreement — and misrepresented their qualifications. He arranged for the buyers to receive money to close out their mortgage loans, though some of the money came from an investor who had been told by Virasith that the investment would “earn substantial returns.” In all, Virasith fraudulently obtained 13 loans, according to the complaint.
At first, Virasith made the loan payments. However, he was unable to get the properties zoned for group home occupancy, as planned, and the money ran out.
Though the alleged criminal misconduct happened more than six years ago, past the five-year statute of limitation on a wire fraud charge, prosecutors reached a deal with Virasith last month. Per the agreement, Virasith will plead guilty to the wire fraud charge, which carries a 20-year maximum prison term and a $250,000 fine. Prosecutors have agreed not to file a bank fraud charge.
Virasith’s attorney, Craig Mastantuono, signed the agreement May 29. He said his client declined to comment. A plea hearing has not yet been set.
Mastantuono said his client has fully cooperated with prosecutors. He also said that once more information comes out, including how Virasith got involved in the project, it “will greatly reduce his level of culpability.”
It was not immediately clear if Jinkins or anyone else is under investigation. Assistant U.S. Attorney Carol Kraft, who is prosecuting Virasith, would neither confirm nor deny that there is an investigation.
Jinkins could not be reached for comment before deadline Tuesday.
However, according to the plea agreement, Virasith is required to “completely cooperate with the government in its investigation of this and related matters, and to testify truthfully and completely before the grand jury and at any subsequent trials or proceedings, if asked to do so.”