An Indianapolis man allegedly tricked dozens of Virginia residents into buying homes in Indiana at inflated prices as part of an elaborate mortgage fraud scheme, Countrywide Financial Corp. claims in a lawsuit.
The lawsuit against Robert Penn documents about 100 properties, and the Associated Press talked to a local real estate agent who said the scheme could involve up to 400 properties and $80 million in loans.
Truck drivers, factory workers and retirees in the Martinsville, Va., area were enlisted in the scheme as straw buyers through invitations to participate in an “investment opportunity” or “real estate investment club,” the lawsuit claims.
Countrywide alleges Penn and relatives in Virginia then bought property using the names of Martinsville residents who returned paperwork with their credit histories and signatures. The lawsuit claims properties in inner-city neighborhoods and new subdivisions in the Indianapolis area were purchased using fraudulently obtained mortgages for an average of $50,000. The properties were flipped for an average of $120,000 each, with the defendants pocketing the difference, the suit alleges.
No criminal charges have been filed in the case.