The FHA program is designed to assist low income families in obtaining housing. If the individuals default on their loans, the Department of Housing and Urban Development, or HUD, reimburses the lender for any losses.
It was a systematic defrauding of the U.S. government between January 2000 and October 2003. Defendant Douglas Hastings of Lena, and others, would purchase inexpensive homes in Freeport.
Defendants Phillip Miskimon and Edward Martins then performed minor cosmetic repairs to the properties and paid $500 to anyone who would refer a buyer to them.
After the buyers were recruited, Miskimon and Martins arranged for the buyers to receive FHA loans, but to be eligible, a homebuyer must meet several requirements, including having enough money to make mortgage payments, have good credit, and be able invest three percent equity into the home.
The indictment alleges that the defendants falsified documents in order to get the unemployed homebuyers qualified. Miskimon and Martins prepared fraudulent "verifications of employment" forms and paid several Freeport area employers $500 for each false form they signed. The defendants also arranged for fraudulent "gifts" to the homebuyers, making it look like the homebuyers had equity, when in fact, they did not.
Forty eight properties were involved in the fraud case; 40 have already been foreclosed by HUD. All of the defendants have been charged with conspiracy and making false statements to the federal government. Each of those statements carry a maximum of five years in prison. Ten of the defendants will be arraigned Thursday, the other two will be in court next week.
The individuals charged in the indictment are as follows:
1) Douglas Hastings, 39, Lena - Owns several businesses including "Stagecoach Trail Realty & Auction" in Lena, the "Presidents Club" bar in Freeport and "Brooks Detail Shop" in Freeport.
2) Philip Miskimon, 49, Winslow
3) Edward Martins, 40, Lena
4) Jeffrey Meyer, 50, Winslow
5) Julie Smith, 47, Lena
-Vice President of the Marvin Uecker Agency in Lena
6) Dale Nelson, 49, Freeport - Owns AMD Sales & Services in Freeport
7) Todd Ernst, 44, Freeport - Owns Ernst Roofing in Freeport
8) Price Brooks, 50, Freeport
9) Chad Nicks, 30, Freeport - Owns Planet Wireless, a cellular telephone business in Freeport
10) Tasha Thompson, also known as "Tasha M. Barnes", 25, Freeport
11) Akia Sanders, 23, Freeport
12) Shawn Fleming, 21, Freeport