A Gary man has been sentenced to nine years in federal prison after a jury
found him guilty of conspiracy to commit wire fraud and wire fraud, in
connection with a home-buying investment scam, the U.S. Attorney’s Office
for the Northern District of Indiana said.
Randall Causey, 48, was also sentenced last week to three years of
supervised released, the U.S. Attorney’s Office said.
According to court documents, Causey, “along with others, recruited five
buyers and talked them into purchasing a combined total of 21 houses in the
scheme,” the U.S. Attorney’s Office said. “Causey told the buyers the houses
were good investments despite knowing that the houses were in disrepair and
located in unsafe neighborhoods. He told them the houses would be
rehabilitated by his company when he knew that little if any of the
necessary repairs would actually be done. He told them he would find renters
to occupy the houses and maintain and manage the properties thereafter,
knowing he would make no effort to do so once the house had sold and the
first month or two of the mortgage had been paid.”
The lenders, meanwhile, “were provided false information regarding the
buyers’ credit-worthiness and were falsely told buyers had made down
payments and taken out seller-second mortgages,” the U.S. Attorney’s Office
said. “As a result, in most of the home sales, the lenders unwittingly
approved financing for 100 percent of the purchase of the homes, leaving no
cushion if the housing market declined.”
“The financial institutions to which some of the mortgages were packaged and
sold by the initial lenders eventually lost their investment as well, as all
of the homes sold in the scheme were eventually foreclosed upon,” the U.S.
Attorney’s Office said. The case was investigated by the FBI.