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.

Posted 2/11/2013