01112012 - News Article - Former official to plead guilty to mortgage fraud

Former official to plead guilty to mortgage fraud

Post-Tribune (IN)
January 11, 2012

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The former director of community development for Gary will plead guilty Friday to taking part in a mortgage fraud that took in almost $200,000, according to court records. 

According to a plea agreement filed Monday in the U.S. District Court in Hammond, Jacquelyn Drago-Hunter will plead guilty to one count of wire fraud. She faces up to 20 years in prison on the count. 

Drago-Hunter was charged in October 2010 along with local businessman Jerry Haymon and two other defendants of operating a mortgage fraud scheme that sold houses in Gary for tens of thousands more than they were worth. They would recruit buyers and provide them with false financial information, such as pay stubs, so that lenders would give them loans in the amount of the beefed-up home prices, according to the indictment. They would keep the buyers and lenders in the dark, however, by creating two closing documents and forging the buyer’s signature on the closing document sent to the banks. 

Haymon would pocket the difference by filing a construction lien against the homes for renovation work his company, Priced Right Construction, had supposedly performed but never did. He would then split the money amongst the defendants and other people who took part in the scheme. 

Haymon, who used grant money from the city to renovate one of the houses, pleaded guilty last year, as did one of the other co-defendants, Sheila Chandler. The fourth defendant, former Gary reserve police officer Phillip Rucker, was found guilty by a federal jury. 

Drago - Hunter says in her plea agreement she worked with Haymon to sell a house at 3829 Connecticut St. for $74,000, $35,000 more than the owner was asking. Drago - Hunter , who owned Maximillian Title, acted as the closing agent for the house and oversaw the two closings, along with giving Haymon the check for $35,000. 

As part of the plea agreement, Drago - Hunter will pay restitution to the victims. 

Her change of plea hearing is scheduled for Friday.