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Zionsville real estate schemer sentenced to 30 months

March 14, 2012

A Zionsville man who pushed real-estate investing schemes has been sentenced to 30 months in prison, U.S. Attorney Joseph Hogsett said Wednesday morning.

Brian Eads, the 48-year-old owner of First Investment Group, pleaded guilty to wire fraud and money laundering after being charged last August. He faced a maximum of 30 years in prison and a $250,000 fine on each of two counts.

“Results such as this are critical if we are to restore Hoosier faith in our financial industry,” Hogsett said of the sentence handed down by Judge Jane Magnus-Stinson. “That is why the U.S. Attorney’s Office has made it a priority to work closely with our law enforcement partners in investigating and prosecuting anyone found to be spreading a culture of corruption in this state.”

Magnus-Stinson also imposed three years of supervised release, drug treatment and restitution of $863,096 to Wells Fargo and two investors whom Eads recruited.

Eads would buy properties at sheriff’s sales in Indianapolis and then recruit buyers. He worked with a loan originator to obtain financing and promoted a no-risk investment program, in which the buyers did not have to make a down payment and would receive thousands of dollars after the purchase.

Eads asked investors to falsify invoices for work that was never done, and Wells Fargo loaned money on 26 properties, losing $380,104, Hogsett said.

In a separate scheme in 2009, Eads recruited a longtime acquaintance to buy investment properties with him. Eads provided titles to properties he didn’t actually own, and the acquaintance lost $295,791, Hogsett said.

Eads repeated the scheme in 2010 with an investor from Utah. The investor wired money to Eads for properties in Indianapolis, Muncie and Anderson but never received deeds and lost $187,200.

The case was the result of a six-year investigation by the Internal Revenue Service and Federal Bureau of Investigation.

“Mortgage fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities,” IRS Special Agent Al Patton said.

 

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