An Ohio man has been sentenced to 10 years in prison for swindling Florida home buyers out of about $36 million.
Akron, Ohio, resident Jack R. Coppenger Jr., 49, pleaded guilty for conspiring to commit bank fraud and making false statements to influence a bank to make a loan. In 2005, Coppenger promised buyers "there's money to be had," and since, more than 40 people have been found guilty of crimes for their involvement in a mortgage fraud scheme at WatersEdge, a development near Allanton, according to federal officials.
"This was all greed," U.S. District Judge John Adams told Coppenger during his sentencing in Akron. "This was all planned, this scam and scheme. You knew and you had to know when this house of cards began to fall. You're still out looking for new people to prey on."
Coppenger, a land developer, contacted dozens of Ohio residents regarding WatersEdge and encouraged them to invest in the property back when the market was hot. He pitched that investors would receive money upfront, make no payments out of pocket, and receive 50 percent of the profit from the sale at the end of the transaction, according to officials.
Ultimately, Coppenger failed to make the mortgage payments on these loans, resulting in a loss of about $36 million. The property, which is adjacent to the Allanton campus of Eastern Shipbuilding, remains largely undeveloped today.
Through using interested investors as "straw buyers," Coppenger essentially bought their good credit scores so he could secure loans for the WatersEdge lots. A straw buyer is a loan applicant whose name is used on a property transfer to hide a third party.
"This defendant led a ring whose crimes covered two states and resulted in losses of tens of millions of dollars," said Steven M. Dettelbach, United States attorney for the Northern District of Ohio. "Mortgage fraud crimes devastate entire neighborhoods and communities."
Lawsuits began in 2006 with California-based Indymac Bank, one of the nation's largest mortgage lenders, alleging Ohio residents acted as "straw buyers" in the sale of WatersEdge lots in Allanton. Appraisals of the lots, the lawsuit says, were raised artificially.
Coppenger also was found guilty of conspiracy to defraud the United States by impairing and impeding the ability of the IRS to assess Coppenger's taxes in 2006 by concealing funds received from a land "flip"conducted by mortgage brokers Andrew D. Norman and Jason A. Herceg, both of Ohio.
Norman and Herceg were operating under the business name of V.P. Equity LLC. They and an unidentified co-conspirator were charged with procuring "straw buyers" and submitting false loan documents to banks to purchase Coppenger's lots in Florida.
Copyright 2013 - The News Herald, Panama City, Fla.