01142012 - News Article - Former Gary official pleads guilty to mortgage scheme

Former Gary official pleads guilty to mortgage scheme

Post-Tribune (IN)
January 14, 2012

http://infoweb.newsbank.com.proxy.portagelibrary.info/iw-search/we/InfoWeb?p_product=AWNB&p_theme=aggregated5&p_action=doc&p_docid=13C4511A0A1D2C20&p_docnum=4&p_queryname=1

The former director of community development for the city of Gary admitted Friday morning in federal court to working with a local businessman in a mortgage fraud scheme that took in almost $200,000. 

Jacquelyn Drago - Hunter pled guilty to one count of wire fraud. 

Speaking softly throughout the hearing and wearing a black outfit with a white scarf, Drago - Hunter admitted under questioning by her attorney that she worked with Jerry Haymon to defraud a bank by jacking up the purchase price of a house in Gary. Drago-Hunter said Haymon, who has already pleaded guilty in the case, had originally convinced a woman and her son to sell him a house they owned in Gary for $36,000. However, he set up a side agreement with another man to buy the house for $74,000, far more than the house was actually worth. 

Drago-Hunter ’s role was to create two separate closing documents, one to fool the owners into thinking they were selling the house for the original asking amount, and another reflecting the $74,000 purchase price, which was given to the bank. 

Assistant U.S. Attorney Gary Bell showed the two documents, noting that the first one said the owners received just $2,300, the actual amount they were paid. The second one, however, shows them receiving about $36,000. That, Drago-Hunter said, was a lie. 

“What happened in reality is that the defendant and Jerry Haymon were scheming,” Bell said. 

Drago-Hunter said that Haymon collected the difference between the prices by filing a lien on the property. The bank wouldn’t have accepted the lien, however, because he had just filed it a few days before closing, and so she wrote out the disbursement to make it appear it was going to the owners. 

As part of Drago-Hunter ’s plea agreement with the government, another charge of wire fraud and two counts of identity theft are being dropped. She faces up to 20 years in prison. 

One of Drago-Hunter ’s other co-defendants, Sheila Chandler, also pleaded guilty in the case. A federal jury found the fourth defendant, Phillip Rucker, guilty in December. 

Drago-Hunter , who continued to work for the city of Gary for about a year after her arrest until October, is scheduled to be sentenced April 19.