An indictment filed September 14, 2005 in the Southern District of Ohio, Western Division, has been unsealed. The indictment names the following persons as defendants and alleges their conduct in a mortgage flipping scheme in the Dayton, Ohio area:

Randall Aaron Davidson, allegedly operated and controlled various real estate businesses including: Capital Properties, Ltd., Capital Properties, LLC, Knab Mortgage, MJR Telecapital Investments, LLC, Rade Ltd., MTR Property Consultants, Randall Davidson and Associates and Restoration, Inc.

Mary J. Donaldson, employee of Davidson, acted as loan processor and mortgage broker

Michael McWhirter, related to Davidson by marriage, recruited 'investors' from Pittsburgh, Pennsylvania area to participate in Davidson’s investment scheme

Jocelyn L. Hammond, loan officer that worked for various title companies. Acted as closing agent and signed various loan documents with knowledge that they contained false information.

The 14 count indictment includes charges of conspiracy to commit mail and wire fraud, bankruptcy fraud, mail fraud, conspiracy to commit money laundering, money laundering and making a materially false statement on a loan application.

The indictment alleges that between November 1, 2001 and April 30, 2003, Davidson and McWhirter placed classified advertisements which appeared in various US newspapers, including the Pittsburgh Post-Gazette, which sough investors to purchase residential properties in Dayton, Ohio and elsewhere with 100% financing and no money down.

Davidson and his coconspirators would make false promises to investors including the following (1) the borrower would receive a $3,000 cash payment upon closing for each and every rental property purchased, (b) all purchases of investment property would be 100% financing with no money down, (c) the purchaser would be permitted to purchase numerous investment properties within the initial ninety day period, (d) all investment properties would be repaired and renovated to rentable standards with no cost to the purchaser, (e) all investment properties would be rented before the purchaser would be obligated to make mortgage payments, (f) each investment property would generate a minimum of a $100 monthly positive cash flow per rental unit.

The indictment alleges that from October 2, 1998 through September 14, 2005, the defendants, along with Gregory Chew, Benjamin Geyer, Kevin Thomas and others, prepared and submitted mortgage loan applications to FDIC insured financial institutions. The properties for which applications were submitted were primarily low income, dilapidated and otherwise depressed residential properties in the Dayton, Ohio area. The loan packages contained false, fictitious and fraudulent statements in various documents, including: loan applications, settlement statements bank statements, bank deposit slips, bank withdrawal slips and appraisals.

Properties referenced in the indictment include:

319-321 Ethel Avenue, Dayton, Ohio

706 Tyson Avenue, Dayton, Ohio

802 Richmond Avenue, Dayton, Ohio

162 North Kilmer Street, Dayton, Ohio

2416 W. Second Street, Dayton, Ohio

23 Hanover Avenue, Dayton, Ohio

713 East Avenue, Hamilton, Ohio

1503 Viewpoint Drive, Beavercreek, Ohio

On December 14, 2004, a Gregory Chew was charged with making a materially false statement on an offer of compromise filed with the Internal Revenue Service. He plead guilty on January 7, 2005 and was sentenced to two years probation along with 100 hours community service.

On March 4, 2005, a Benjamin Geyer was charged with money laundering and wire fraud in connection with false representations in association with the planned purchase of property at 1897 Winding Brook Way, Sugarcreek Township, Ohio. Geyer plead guilty on March 28, 2005 and was sentenced to 3 years probation, of which 4 months would be served under home confinement, along with 100 hours community service.