08022011 - News Article - Feds detail mortgage fraud case

Feds detail mortgage fraud case

Post-Tribune (IN)
August 2, 2011

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Federal prosecutors have laid out part of their case against Gary businessman Jerry Haymon, describing testimony they say will show how he created a mortgage fraud scheme that took in $300,000. 

The notice of intent, filed in the U.S. District Court in Hammond, described five witnesses, including three women who already have pleaded guilty in connection with the scheme, who will testify against Haymon, who is charged with four counts of wire fraud. 

Haymon and co-defendants Phillip Rucker, a former Gary reserve police officer, and Jacquelyn Drago - Hunter , a Gary city employee, are accused in an indictment with finding potential buyers for houses, then providing them documents to make it look like they met all the financial obligations for a loan when they didn’t actually. The buyers also agreed to pay more for the homes than the sellers were asking, although the sellers never were told about the increased offers, the indictment says. Instead, the defendants would claim that Haymon’s company, Priced Right Construction, had performed renovation work on the houses that equaled the difference, so the extra money would be paid to them at closing. 

Although in the beginning Haymon had to just tell title companies he performed renovations, the rules changed in 2008 so he had to provide an actual lien. According to the new filing, Haymon filed fake liens on the properties but was caught by two owners, both of whom also are expected to testify. 

One owner was set to sell her house until the closing was canceled. She then received a notice about the lien for construction costs, even though no work had been performed on her home, according to the filing. Another owner found her own buyer and discovered the lien when she tried to close the sale. 

The filing says their testimony will show Haymon did not mistakenly file the liens but did so on purpose, knowing they were for work that was never performed. 

Three other witnesses — Sheila Chandler, Sarah Harris and Laquishea Rogers — will detail how they became involved in the scheme. 

The new testimony will include that Haymon often provided the downpayment money to his clients, which was not said on closing documents, and that he paid employees to create fake financial documents, such as W-2 tax forms, for the buyers. 

Also, Haymon didn’t just use his business, Priced Right Construction, as a front for the construction liens but also used it as a cover for clients to claim they worked for the company, according to the filing. Chandler is expected to testify she never saw any actual employees. 

He gave Harris free office space to work out of his business at 5421 Broadway in Merrillville and had her hire Rogers, according to the filing. The two are expected to testify they would then use Haymon’s business properties as the locations of apartments buyers supposedly were renting. 

The criminal trial is scheduled to start Aug. 22.