Ex-investors plead guilty to mortgage fraud

Two former real estate investors have pleaded guilty to federal charges that they set up straw deals to obtain inflated
mortgages on more than 100 Indianapolis houses.

Forty-four-year-old Robert A. Penn of Naples, Fla., and 45-year-old
Kevin M. Lafavers of LaGrange, Ky., face sentencing at a later date. Both pleaded guilty to charges of wire fraud, while Penn
also admitted to money laundering conspiracy.

Both former Indianapolis residents were indicted in July on charges that
from 2003 to 2005 they bought many of the homes for $120,000. Those were later seized by lenders and resold at sheriff’s sales
for $3,500 to $26,000.

Under the plea, Penn admitted to fraudulently buying 136 properties for $16.6 million. Prosecutors
say the fraud loss on the properties was $6.9 million.

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