(Post-Tribune News) A Lowell man and two Illinois men were indicted by a federal grand jury for a HUD house flipping scheme in several communities across Northwest Indiana and the southwest suburbs of Chicago.

Sergio Garcia Sr., 46, of Chicago, and Sergio Garcia Jr., 27, of Lowell, each face one count of conspiracy to commit mail fraud and 10 counts of mail fraud. Lansing, Ill., resident Timothy D. Greene, 29, faces one count of submitting fraudulent information to HUD.

Between Jan. 1, 2011, and May 31, 2014, Sergio Garcia Sr. and Sergio Garcia Jr. purchased more than 40 homes from HUD and turned around and sold them the same day or soon afterward for a profit to subsequent buyers, according to the U.S. Attorney's office.

The homes are in Gary, Hammond, Merrillville, Whiting, East Chicago, Hobart, St. John, Valparaiso, and Lake Village; as well as Cicero, Chicago, Maywood, Alsip, Stone Park, Riverdale, Chicago Heights, Berwyn, Lansing, Stickney and Evergreen Park in Illinois.

In the purchase contracts provided to HUD, the Garcias said that they were purchasing the properties as investors and would pay cash or use other non-FHA financing, according to the indictment. The Garcias also 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 claimed 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, the indictment said. The letters were found to be altered, forged and counterfeited; the lines of credit referenced therein did not exist; and the signatures thereon were forged and unauthorized, according to the indictment...