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Local man gets 37 months in mortgage-fraud scheme

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A federal judge has ordered an Indianapolis man to serve 37 months in prison and pay $1.7 million in restitution for his role in a massive mortgage fraud scheme.

Timothy A. Brown, 45, pleaded guilty to one count of wire fraud and one count of money laundering. As part of the plea deal, he accepted responsibility for 29 fraudulent loans totaling $4.5 million.

The U.S. Attorney’s Office for the Southern District of Indiana said the scheme involved 149 fraudulent loan transactions totaling $19.7 million between 2003 and 2005.

Brown is the second defendant so far to receive prison time.  In September, Charter Homes Inc. founder Jerry J. Jaquess received 30 months in prison. Seven other defendants still have cases pending in front of Chief Judge David F. Hamilton.

The charges followed an investigation by special agents of the IRS Criminal Investigation Division, the U.S. Attorney’s Office and the FBI.

Scheme participants bought homes in Windsor Village near Arlington Avenue and 21st Street in Indianapolis for $50,000 each, the U.S. Attorney’s Office said. Then, with the help of inflated appraisals, they recruited investors to take out $96,000 loans to purchase the homes for $120,000 each.

The buyers were recruited members of an investment club who were paid $4,000 for each home in exchange for using their credit. Most of the investors were in Virginia and never saw the homes.

No payments were made on the mortgages and the lenders lost the entire loan amounts, the U.S. Attorney’s Office said. Many of the duplexes were later resold for between $3,500 and $15,000.

Jaquess and Charter Homes were the subject of an IBJ investigative story last year.

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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