Merrillville man admit to role on home sale scam
BY Teresa Auch Schultz firstname.lastname@example.org September 28, 2011 4:30PM
Updated: November 11, 2011 5:07PM
A Merrillville man is admitting he worked with others in a mortgage fraud scheme that took in almost $650,000.
According to a plea agreement filed Wednesday in the U.S. District Court in Hammond, Gordon Rainey, owner of Netlink Construction Investment Group Inc., will plead guilty to one count of conspiracy to commit wire fraud and eight counts of wire fraud.
Rainey was originally charged in May 2010 with two other defendants of buying houses for increased prices and then pocketing the extra money by filing false liens on the property. The charges grew to include eight people, however, and about 25 homes. Rainey was charged with making $647,213 from the scheme, part of which he shared with the other defendants, according to the indictment.
The indictment claimed that Rainey and his employee, Randall B. Causey of Gary, would recruit people to buy homes in Northwest Indiana. They would tell the owners the price being offered was the suggested purchase price then use fake closing documents to convince the owners that was the price the home sold for.
However, they would then fill out another closing document, faking the owner’s information, with an inflated purchase price, usually several tens of thousands of dollars more than the actual purchase price. Rainey would file liens on the property saying his company had performed construction work that it was still owed money for, according to the indictment, when the work had actually never happened. He would use this lien to pocket the difference between the two prices.
The defendants would also provide money and false information, such as pay stubs and bank records, for the buyers to successfully apply for the loans.
Rainey is the fifth person to plead guilty in the case. He faces up to 20 years in prison on each count. He also agrees to pay full restitution.