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Grand Jury Says Family Scammed Feds In Huge House-Flipping Scheme

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U.S. Department of Housing and Urban Development (HUD) officials took years to catch a family accused of illegally flipping publicly owned homes in Illinois and Indiana, according to court records obtained by The Daily Caller News Foundation.

Sergio Garcia, 46, and Sergio Garcia Jr., 27, are accused of falsifying documents to sell 40 HUD-owned homes to home buyers for a profit. A federal grand jury recently indicted the Garcias, along with their alleged accomplice Timothy D. Greene, the Department of Justice (DOJ) said in a statement.

The Garcias provided purchase contracts to HUD claiming they would buy the properties as investors with cash or other financing, and mailed fraudulent letters saying they had sufficient funds for the deals. The Garcias put “For Sale” signs at the HUD  homes before any deal could go through, attempting to sell to buyers the same day or as quickly as possible, DOJ said. 

The two face conspiracy to commit mail fraud and 10 counts of mail fraud. Greene faces a charge for submitting fraudulent information to HUD, according to the DOJ.

A separate court case against the Garcias and the United States that was eventually dismissed claimed the federal government knowingly let the duo target immigrants and minorities for a decade. The case, filed in September 2015 by Carlo Michelis, claimed HUD was “aware of these activities, but failed to take steps to safeguard HUD property or to protect the public.”

Michelis requested the judge to dismiss the civil case without an explanation, a request the judge granted. Court documents do not mention any in-court or out-of-court settlement. The civil case raises the question of whether the Garcias’ alleged behavior took place over a longer period than the three years the current criminal case claims, and why HUD failed to catch the alleged behavior sooner.

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