Archives For proof of funds

Sergio Garcia, Sr., 46, Chicago, Illinois and Sergio Garcia, Jr., 27, Lowell, Indiana were indicted by a federal grand jury and charged with conspiracy to commit mail fraud and ten substantive counts of mail fraud.  The indictment also charges Timothy D. Greene, 29, Lansing,Illinois with submitting fraudulent information to HUD. All three were charged in connection with their part in a house flipping scheme involving HUD properties.

The indictment alleges that between January 1, 2011 and May 31, 2014,  Sergio Garcia, Sr. and Sergio Garcia, Jr. conspired with others known and unknown to the Grand Jury to engage in a scheme to defraud and to obtain money by means of false pretenses, representations and promises.

The alleged scheme involved offering to buy more than 40 HUD homes situated in the following cities or towns in Indiana:  Gary, Hammond, Merrillville, Whiting, East Chicago, Hobart, St. John, Valparaiso, and Lake Village; as well as the following cities or towns in Illinois:  Cicero, Chicago, Maywood, Alsip, Stone Park, Riverdale, Chicago Heights, Berwyn, Lansing, Stickney, and Evergreen Park.  The conspirators sought to purchase the homes from HUD and sell them the same day or soon thereafter for a profit to subsequent buyers.

The purchase contracts provided to HUD to purchase the properties stated that the conspirators or one of their businesses were purchasing the properties as investors and would pay with cash or use other financing not involving FHA.  To support their claimed financial ability to pay for the homes, the conspirators mailed fraudulent letters purporting to show that they or their company had access to the funds needed to complete each purchase.  Many of the letters purported to be written by a private venture capital business and falsely stated that a conspirator or their business held a line of credit of up to $500,000.00, when in fact, as the conspirators well knew: these letters were altered, forged and counterfeited; the lines of credit referenced therein did not exist; and the signatures thereon were forged and unauthorized.

The alleged scheme further involved the conspirators placing their own “for sale” signs at the HUD homes before their purchase from HUD had occurred.

When the conspirators could not find a subsequent purchaser to buy the homes, they allowed their purchase contracts with HUD to expire.  The conspirators filed false liens on many of the HUD homes after their purchase contracts expired.  The false liens hindered HUD from selling the homes to subsequent purchasers.  The conspirators requested money from subsequent purchasers to release the false liens.

The indictment also alleges that on or about February 13, 2012, Timothy Daniel Greene provided a fraudulent letter to HUD stating he held an approved line of credit with a venture capital business and that he did so for the purpose of influencing HUD to approve a purchase offer he had submitted for a property in Chicago, IL.

The indictment was announced by United States Attorney David A. Capp.  The case is being investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General.  The case is being prosecuted by Assistant United States Attorney Jill R. Koster.