News

Missouri homebuilder accused in fraud scheme

ST. LOUIS | A builder of expensive St. Louis County homes faces a federal indictment for fraud that allegedly cost prospective homeowners, banks and subcontractors more than $10 million, the U.S. Attorney's office in St. Louis said Friday.

The 10-count indictment against Edward Levinson, 49, of Chesterfield was handed up late Thursday.

Levinson's attorney, Bill Margulis, said he will plead not guilty. He said arrangements were being made to have Levinson voluntarily surrender Monday morning.

Levinson Homes of Chesterfield develops high-end properties in west St. Louis County. Its Web site says the Terra Vista development's homes start at $450,000. The Wynncrest development has homes "starting in the $600,000s." The Belle Maison development's homes list from $1.2 million and up.

Levinson had loans through Royal Banks of Missouri, First Bank and Enterprise Bank and Trust. The loans were used to buy and develop land, and construct homes.

Troubles began in late 2007 when Royal Banks of Missouri "became uncomfortable" with Levinson's outstanding loans, according to the U.S. Attorney's office, which said Levinson was having cash flow problems.

Levinson was able to obtain additional financing but prosecutors said he began using home buyers' deposits and down payments for other purposes, even though they had requested that the money be kept in escrow.

Some homes were never completed. Prosecutors said some buyers failed to close on their contracted homes and lost all of their down payments.

Royal Banks and Enterprise Bank and Trust foreclosed on Levinson's Wynncrest and Terra Vista projects starting in October. The indictment said that resulted in a loss of about $1.5 million for Royal Banks, $1 million for Enterprise, $300,000 for home buyers, and $500,000 in subcontractor liens.

First Bank foreclosed on Levinson's Belle Maison project in December. U.S. Attorney Catherine Hanaway said the result was losses of $8 million on First Bank loans, $241,000 to home buyers, and about $1 million on subcontractor liens.

Margulis said problems could have been avoided if banks had been more willing to work with Levinson as the economy began to sour.

"There are many people who have been damaged needlessly," Margulis said.

Levinson could face up to 30 years in prison if convicted, and restitution would be mandatory.

  Comments