Indymac Bank claims 41 Ohio residents agreed to be straw buyers of overvalued properties in Florida as part of a $20 million scheme to defraud the bank.

California-based Indymac alleges in a lawsuit that VP Equity LLC submitted a series of loan applications to finance the purchase of lots in a Panama City, Fla., development, WatersEdge, that were priced at $350,000 to $590,000.

The lawsuit alleges appraisals of the properties were inflated, and that the straw buyers expected to profit from a property-flipping scheme without making loan payments, the Akron, Ohio, Beacon Journal reported.

The suit also names Ohio-based companies Ocean Sands Investment Group LLC and East Bay Land Holdings LLC for their alleged involvement in selling the lots, and a Florida appraiser and a Florida law firm said to have handled many of the transactions.

The suit seeks to nullify the loan agreements and make the defendants responsible for the balance of the principal, and calls for additional remedies, including punitive damages.

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