The onetime owner of a Twin Cities-based construction company has pleaded guilty to stealing nearly $900,000 from investors who were promised that he would use the money to buy and renovate residential real estate across the Twin Cities and then share the profits when the properties were resold, or "flipped."
Jesse W. Haug, 33, of Rosemount, admitted in federal court in Minneapolis last week to wire fraud in connection with the scheme he carried out in 2015 and 2016.
While the plea deal does not spell out an agreement on Haug's sentence, it does say that federal guidelines suggest prison time of anywhere from 2 ¾ to 5 ¼ years, supervised release, fines and restitution.
Through his business, 7-10 Services, Haug received $880,000 from two investors in properties throughout the metro area. To conceal his thefts, Haug fabricated documentation showing pending real estate closings and resales of properties that Haug claimed to have flipped, as well as fictional documents showing "returns" from the so-called investment properties.
In reality, Haug spent the investment money on personal expenses, including gambling, for himself and his wife and never bought or sold any properties.
In October 2015, Haug went to the Minneapolis-St. Paul International Airport and withdrew $500 from his company's bank account, paid $590 to Delta Air Lines, $777 to Hotels.com, another $932 to Delta and $5,300 to the Bellagio Hotel and Casino in Las Vegas, according to the criminal complaint.
In December 2016, law enforcement searched his two homes in Rosemount. At the first residence, they seized body armor and 10 guns, the charging document said. A search of the second home turned up drug paraphernalia, the drug ecstasy, a small amount of marijuana, and marijuana gum, candy and liquid.
The addresses he used as part of his scheme were in St. Paul, Apple Valley, Rosemount, Burnsville, Lakeville, Edina, Eagan and Minnetonka.
Earlier, a former business partner of Haug's won a $552,000 civil judgment against him in a Dakota County lawsuit that accused Haug and 7-10 Services of purloining more than $400,000 from their two businesses — MJ Homes and Next Level Sports, which provided training for youth hockey players.
Paul Walsh • 612-673-4482