Mortgage fraud trial gets preview in documents

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Updated: February 19, 2012 8:17AM

Federal prosecutors offered on Tuesday a preview of their case against a man scheduled to go on trial next week on charges of taking part in a $600,000 mortgage fraud scheme.

At the same time, however, Randall B. Causey’s attorney has filed a motion to dismiss eight of his nine counts, claiming they are duplicitous and redundant.

According to a Santiago proffer filed Tuesday in the U.S. District Court in Hammond, the federal government plans on proving that Causey worked with other defendants to buy homes in Gary and elsewhere in Lake County for tens of thousands of dollars more than they were worth and pocket the extra money. Causey’s role was to recruit buyers for the homes, the proffer says, something which he excelled at partly because he was a “lady’s man.”

The proffer says he went so far as to promise a woman who is not a citizen of the United States to marry her so she could bring her children to the country. He had no intention of following through on that promise, though, and would make fun of the woman to the other defendants, according to the proffer.

It also says he would recruit buyers by promising them they could keep some of the extra cash from the mortgage. However, his co-defendants will testify that some of the buyers would later call them claiming they never received those payments.

The proffer also says the scheme started because of a similar scheme being run in the first half of the last decade by local businessman Jerry Haymon, who recently pleaded guilty to a similar but separate case in federal court. Haymon helped to artificially raise the price of rental properties in Gary, according to the property, by getting bloated appraisals for the properties. This affected the property values of nearby homes, “until eventually much of the Gary housing market was artificially inflated,” the proffer says.

Causey is charged with one count of conspiracy to wire fraud and eight counts of wire fraud. However, his attorney, R. Brian Woodward is arguing in a motion filed Monday that the charges are redundant because counts two through nine reincorporate the conspiracy count. That essentially means two counts are being charged in counts two through nine, conspiracy and wire fraud, which can confuse the defendant and jury.

“If you have two distinct offenses in a single count, it’s duplicitous,” Woodward said.

A hearing is scheduled for Wednesday on these and other motions filed.