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Zionsville real estate schemer sentenced to 30 months

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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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  • Tip of the Iceberg
    When Realtors, Appraisers, and Banks created the Housing Bubble between 2004-08, where was the Justice Department. The pumping of property values in California, Arizona, Nevada, Texas, Florida, New York and a few smaller markets, created a mess that is still not resolved. Home buyers were coached to file false earnings and credit history statements, and appraisers assisted with inflating real estate values, all aimed at getting the buyers to purchase more home than they could afford, all with the promise of the appraised value rising year-over-year. Hundreds of thousands of loans were Sub-prime, Zero-Down, and often 100% or higher. Why would banks loan 125% on homes in any market? Could it be that people were coached and promised hugh returns, if they agreed to pay no-interest mortgage payments for two years, and then sell the house for a tax-free profit. Brace yourself, mortgage foreclosures are going to increase, because people are still upside-down on home loans they should never have been pushed into in the first place. As for the banks, our tax dollars are covering the banking fraud.

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