Just when former York County Councilman Paul Lindemann had a chance at a fresh start after a conviction for mortgage fraud, he has been fined for failing to tell state real estate regulators he is a convicted felon.
Lindemann, 33, released in February after 13 months in prison, “demonstrated bad faith, dishonesty, untrustworthiness, or incompetency” and was publicly reprimanded in an order dated Wednesday by the S.C. Real Estate Commission.
He was fined $500. He also owes the U.S. government $314,000 and is on federal probation.
Lindemann could not be reached for comment.
He represented Fort Mill on the County Council for two terms after his election in 2006.
He could face more trouble in federal court if prosecutors and probation agents try to revoke his probation.
When Lindemann was sentenced to federal prison, U.S. District Court Judge Cameron Currie stated that frauds such as his were part of the national collapse that crippled the economy.
And now he has been penalized for another fraud.
The Real Estate Commission could have revoked Lindemann’s license, but it did not, despite finding that he “lacks the professional or ethical competence to practice the profession or occupation.”
The order against Lindemann describes the violation of failing to tell state regulators about being a felon in a financial real estate crime as “likely to deceive, defraud or harm the public.”
Lindemann’s real estate license went from provisional to a regular sales license in 2011, after he was under indictment for fraud. Lindemann didn’t regulators of his indictment in 2011, either.
The commission is made up of 10 licensed real estate professionals from around the state.
Manning Biggers of York, vice-chairman of the commission, said Friday that any allegation of failing to notify state regulators of a financial felony is “serious.”
Felons can have licenses to buy or sell property but generally would not be allowed to have broker-in-charge status and would have to be supervised by another licensee, Biggers said.
State law requires anyone with a real estate license to notify the commission within ten days of conviction of a crime involving forgery, embezzlement, fraud or other financial crimes.
Lindemann didn’t tell the licensing board anything until four months after he was out of prison, documents show.
The real estate commission determines who is qualified to hold a license, ensures compliance with the license law, and disciplines licensees found in violation. Lindemann attended a real estate commission hearing on June 12, records show, and acknowledged his conviction.
“The reason that there is a licensing agency is to make sure the public is protected,” said Lesia Kudelka, spokeswoman for the state Department of Labor, Licensing and Regulation.
Lindemann has the right to appeal the real estate commission ruling, Kudelka said, but no appeal has been filed.
It remains unclear if the reprimand for violating state licensing laws will affect Lindemann’s federal probation status. He is serving three years probation and owes more than $300,000 in restitution. Federal prosecutors and probation agents have the authority to ask a federal judge to revoke probation if later allegations or violations occur.
Federal prosecutors used that authority against Lindemann in January 2012 after he was charged with DUI while awaiting his prison reporting date. In that instance, Lindemann was ordered to jail before his original report date even without a DUI conviction.
In that court hearing, a probation agent testified that Lindemann wanted to travel to Las Vegas before heading to prison, and a police officer testified Lindemann refused to admit he was even driving the car involved in the DUI.
John Potterfield, the federal prosecutor who put Lindemann in prison for the mortgage scam, declined to comment Friday on Lindemann’s most recent violation of state law. Dickie Brunson, in charge of the federal probation department for South Carolina, could not be reached Friday.
Lindemann committed the mortgage fraud in 2008, but was not indicted until April 2011. He was issued a provisional real estate sales license, to work under Ward Properties, in July 2010, Kudelka said. He was upgraded to a sales license in July 2011.
Lindemann, a salesman for Ward Properties of Rock Hill according to documents, first admitted his conviction when he tried to renew his real estate sales license on June 5.
The federal mortgage fraud is not Lindemann’s only conviction. While in prison, he pleaded guilty to the 2012 DUI, which included driving over a mailbox and fleeing the scene. He also was convicted of unlawful alcohol consumption while driving after a 2008 incident in Columbia.
Lindemann also defaulted on several court-ordered civil judgments from other connected business deals, court records show.
In his mortgage fraud conviction, Lindemann claimed to make $35,000 per month in order to get a mortgage for almost a million dollars to buy a Tega Cay home he planned to flip.
Lindemann, who sold real estate and cars, in fact made far less; so much less that when arrested, he qualified for a federal public defender because he was declared indigent under federal court rules.
Neither Lindemann, nor Ward Properties, is a member of the Piedmont Regional Association of Realtors, the trade group made up of Realtors from York, Chester and Lancaster counties.
A person can have a license to sell real estate in South Carolina without being a Realtor or belonging to local, state and national organizations, Kudelka said.
The South Carolina Association of Realtors has been pushing state lawmakers for stricter background checks and other measures for people buying and selling property in the state.