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Grand jury to probe mortgage scheme
U.S. Attorney Susan Brooks has begun a probe into a massive mortgage scheme that has roiled a modest Eastside neighborhood and left more than 100 Indianapolis homes in foreclosure.
Grand jury to probe mortgage scheme
100 homes on Eastside ended up in foreclosure
By Ted Evanoff
U.S. Attorney Susan Brooks has begun a probe into a massive mortgage scheme that has roiled a modest Eastside neighborhood and left more than 100 Indianapolis homes in foreclosure.
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WHAT'S NEXT
A federal grand jury will meet Nov. 7 for the inquiry into Fishers real estate salesman Robert Penn, according to a copy of a subpoena. The grand jury apparently will focus on the hard-hit Eastside neighborhood of Windsor Village. | |
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A federal grand jury will meet next month in U.S. District Court in Indianapolis for the inquiry into Fishers real estate salesman Robert Penn and an apparent circle of business associates, according to a copy of a subpoena obtained Friday by The Indianapolis Star.
The subpoena, dated Oct. 6, is the first sign that authorities are actively looking into multiple complaints involving Penn that trace back to 2004.
Brooks, out of the city Friday, said through a spokeswoman that she "cannot comment about anything related to an ongoing investigation.''
The federal inquiry shows that a mortgage fraud epidemic going on nationwide has reached Indianapolis on a massive scale. The FBI estimates that mortgage fraud cost lenders nationwide more than $1 billion last year.
The Star earlier reported that the Eastside fraud case and others apparently linked to the Penn group could involve as many as 400 separate homes. That could make it one of the largest fraud cases in the nation.
The grand jury meeting Nov. 7 appears to be focusing on the hard-hit Eastside neighborhood of Windsor Village, which is central to the fraud lawsuit that came to light publicly Sept. 28.
That lawsuit was filed June 22 in Marion Superior Court in Indianapolis by mortgage giant Countrywide Home Loans of Calabasas, Calif. Countrywide alleges Penn, three members of his family and a business circle conspired to inflate property values on paper in a scheme to pocket an undisclosed amount of illicitly gained cash.
According to the lawsuit, Penn's group bought houses at a normal price, rigged appraisals to push up the value, sold Countrywide 112 inflated mortgages, then pocketed the difference. The lawsuit claims the scheme used the names of unsuspecting investors, chiefly in Virginia, to help make the doctored mortgages pass muster as clean documents.
Penn's attorney, Matthew Griffith, did not return a phone call Friday seeking comment.
Countrywide, the nation's largest mortgage lender, typically buys thousands of mortgages from other bankers every day and bundles them into a single massive investment.
These investments are immediately sold to pension funds, insurers and others in need of the continual cash stream coming from home buyers who make monthly payments on their home mortgages.
Bundling mortgages has pushed down interest rates for home buyers. It also has showered uncommon wealth on mortgage executives. Total compensation last year for Angelo Mozilo, Countrywide's chairman, was $57 million, reports the business magazine Forbes.
At the same time, though, the mortgage business has become prone to an untold number of fraud schemes. In recent weeks, reports of fraud indictments and grand jury investigations have surfaced in Atlanta; Houston; Portland, Ore.; and Kansas City, Mo.
A grand jury is a group of residents, usually a dozen or more, brought together by investigators to examine alleged violations of the law. They decide whether there is sufficient evidence to formally accuse a person of a crime.
In Indianapolis, the Oct. 6 subpoena seeks records of financial dealings with 10 entities: Penn, wife Tamara Scott-Penn, mother Beulah Penn, sister Sharon Penn, Jerry Jacquess, Caroles Jacquess, Land Economics LLC, Homevestors LLC, EU Group LLC and RDJ Custom Homes.
The names of Penn, his wife, sister and Land Economics. appear as defendants in the Countrywide lawsuit.
Call Star reporter Ted Evanoff at (317) 444-6019. |
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