Trial begins in home sale scheme case

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Updated: February 25, 2012 8:21AM

A federal prosecutor argued Monday that a Gary man and his co-defendants used inflated housing prices in Gary and Merrillville to rake in more than $600,000 as part of a mortgage fraud scheme in 2005 and 2006.

Randall B. Causey is guilty only of being paid a finder’s fee for recruiting people to buy the property, his attorney, R. Brian Woodward, said during the opening arguments of Causey’s jury trial at U.S. District Court in Hammond.

Causey is charged with conspiracy to commit wire fraud and wire fraud, with the federal government claiming he and the other defendants sold 25 houses for more than they were worth and pocketed the extra cash by filing construction bills for work that had never been performed.

Assistant U.S. Attorney Jill Koster accused Causey of using his charm and skills as a “ladies’ man” to seek out buyers, almost all of whom were women, who made little money and had never bought a house before. He promised the buyers, none of whom was from Northwest Indiana, that they could use the homes as investment rental properties and that Netlink Construction, which Causey co-owned, would act as property managers for the new owners.

“He actually told one buyer all she had to do was sit at home and watch her bank account grow,” Koster told the jury.

Two of his co-defendants who have already pleaded guilty, Gordon Rainey and Sheila Chandler, will testify about how they knew used their knowledge of inflated housing prices in the area to find nearby homes that could then be sold for more than they were worth, Koster said.

However, Woodward called out the government’s two star witnesses, saying they were the ringmasters of the scheme. He pointed out that Chandler has committed fraud and forgery for years as a mortgage officer and that she dragged her own son into the scheme.

She is “absolutely heartless and absolutely soulless,” he said.

Rainey, Woodward said, used his daughter’s bank account to hide the stolen money. Woodward said his client simply found buyers for Rainey and Chandler and was paid a finder’s fee for doing so.

Testimony is scheduled to continue Tuesday.