(USAO, IN) HAMMOND- United States Attorney David A. Capp announced that a federal grand jury in Hammond returned an indictment charging three individuals for their part in a house flipping scheme involving Department of Housing and Urban Development (HUD) properties.

The indictment charges Sergio Garcia, Sr.,46, of Chicago, IL and Sergio Garcia, Jr., 27, of Lowell, IN with conspiracy to commit mail fraud and ten substantive counts of mail fraud.  It also charges Timothy D. Greene, 29, of Lansing, IL with submitting fraudulent information to HUD.

The indictment alleges that between January 1, 2011 and May 31, 2014, Defendants Sergio Garcia, Sr. and Sergio Garcia, Jr. conspired with others known and unknown to the Grand Jury to engage in a scheme to defraud and to obtain money by means of false pretenses, representations and promises.

The alleged scheme involved offering to buy more than 40 HUD homes situated in the following cities or towns in Indiana:  Gary, Hammond, Merrillville, Whiting, East Chicago, Hobart, St. John, Valparaiso, and Lake Village; as well as the following cities or towns in Illinois:  Cicero, Chicago, Maywood, Alsip, Stone Park, Riverdale, Chicago Heights, Berwyn, Lansing, Stickney, and Evergreen Park.  The conspirators sought to purchase the homes from HUD and sell them the same day or soon thereafter for a profit to subsequent buyers.

The purchase contracts provided to HUD to purchase the properties stated that the conspirators or one of their businesses were purchasing the properties as investors and would pay with cash or use other financing not involving FHA.  To support their claimed financial ability to pay for the homes, the conspirators 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 purported 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 $500,000.00, when in fact, as the...