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Twin Cities construction company owner pleads guilty to defrauding investors out of more than $1 million

6/5/2018 5:00:40 PM

For Immediate Release

MINNEAPOLIS – The Minnesota Commerce Department announced that a Rosemount man has pleaded guilty for an investment fraud scheme in which he made false promises to investors that his construction company would use their money to buy, renovate and re-sell homes in the Twin Cities area.

Jesse Wells Haug, age 33, pleaded guilty to one count of wire fraud before U.S. District Chief Judge John R. Tunheim in Minneapolis. The case is the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.

According to his guilty plea and documents filed in court, Haug was the owner of a Twin Cities-based construction company called 7-10 Services, LLC.

From 2015 through the end of 2016, he executed a scheme to defraud investors by falsely representing that he would use their money to purchase and renovate residential real estate. In exchange, he would share the profits when the properties were re-sold, or “flipped.”

According to his guilty plea and documents filed in court, Haug obtained $880,000 from two victim-investors to purchase and renovate residential properties located throughout the Twin Cities.

During the course of Haug’s interactions with the victim-investors, he created false real estate and financial documents to cover up his fraud. For example, fake documents allegedly showed how the investment money was being used and the upcoming real estate closings and re-sales of properties Haug claimed to be flipping.

In reality, Haug spent the investment money on personal expenses and never bought or sold any of the properties.

Media Contact
Ross Corson
Director of Communications
Minnesota Department of Commerce
p: 651-539-1463 | c: 651-368-5050 | ross.corson@state.mn.us

Enforcement

Fraud

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