The Special 2001 Grand Jury today indicted four men in connection with an alleged flipping scheme in Chicago, Illinois. Those indicted were
Demetrius Barren dba Allegria Realty Consultants, 104 South Michigan Avenue, Chicago, Illinois;
Carl Miller (previously employed as mortgage loan officer by Oxford Financial Services);
Julian Bishop (previously employed as mortgage loan broker at Illinois Capital Corporation);
Kenneth Washington, licensed real estate appraiser
The indictment charges all defendants with wire fraud and related charges. The indictment also refers to Melva Wynn an appraiser doing business in Chicago as Wynnstar appraisals. Wynn is alleged to have shared office space with Bishop and is not named as a defendant in the indictment.
The indictment alleges:
The scheme operated from 1997 through at least February 1999. Barren would purchase dilapidated properties in Chicago, Illinois and pay real estate appraisers, including Washington and Wynn to pprepare inflated appraisals. The appraisals prepared by Washington and Wynn did not disclose the need for rehabilitation and repair and used superior properties as comparables. Barren would tell potential purchasers that Barren would pay for rehabilitation, make the first few mortgage payments or assist with mortgage payments until the properties began generating rental income and promised them there would be no down payment or closing costs. Many of the purchasers had not previously purchased proeprty and he convinced numerous people to purchase two or three properties at a time. The real estate contracts falsley represented that down payments were made and at least one contract contained a forged signature. Barren would provide buyers with money to deposit into their accounts, obtain verifications of deposit from bank officials and then require that the money be returned.
Barren would refer the purchasers to mortgage officers or brokers including Miller and Bishop who would submit false documents to mortgage lenders including inflated appraisals, false verifications o deposit, fabricated employment records and fraudulent loan applications (including occupancy misrepresntations.) Miller and Bishop concealed from lenders the fact that borrowers were seeking multiple mortgage loans from different lenders.