Feds charge 16 with fraudulent flips of more than 2,000 Detroit homes

Scheme that netted $20M from hundreds of victims said to contribute to neighborhood blight

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A telemarketing scheme that took in more than $20 million from hundreds of victims nationwide by flipping 2,000 homes purchased for as little as $500 each also contributed to neighborhood blight in Detroit, federal prosecutors said in announcing the indictment of 16 people accused of fraud. The scheme, run out of call centers in Florida and New York, employed familiar-sounding company names -- including Prudential REO Group, Allstate REO Group and Blackstone Real Estate Group -- to dupe victims. The alleged perpetrators of the scheme "did more than steal money -- their greed and fraud compounded the proliferation of vacant homes left for ruin in far too many Detroit neighborhoods," said Paul Abbate, special agent in charge of the FBI's Detroit field office, in a statement. According to a grand jury indictment, the scheme worked like this: First, sales agents or "brokers" made an initial call to prospective investors using a scripted sales pitch, inviting them to buy cheap ...