A 10-count federal indictment unsealed in Salt Lake City charges Christopher D. Hales, 29, of Midvale, with mail, wire and bank fraud and with money laundering in connection with an alleged mortgage fraud scheme.
The indictment involves two properties, one in Lindon and one in Salt Lake City.
The indictment alleges Hales and other unindicted co-conspirators executed a scheme to produce income from false appraisals to artificially inflate the purchase price of the residences.
The FBI alleges that Hales arranged to purchase the homes through straw buyers and took the false equity proceeds stemming from those sales for himself, the straw buyers and the co-conspirators.
For the Lindon property, the indictment alleges that Hales arranged for a false lien to be attached, ostensibly to renovate the house to the increased value predetermined by Hales. Hales then arranged to obtain a loan that was $194,000 more than the house was worth based on the false lien.
For the Salt Lake City property, the indictment alleges Hales and his co-conspirators arranged first for the house to be appraised at more than $250,000 than its market value, obtained a loan relying on that false appraisal and distributed the alleged fraudulent proceeds among themselves.
Approximately 10 months later, prosecutors say Hales and other co-conspirators arranged for the house to be purchased by a straw buyer with another false appraisal that reset the house’s value at an additional $250,000 above the previous fraudulent price. According to the indictment, those proceeds were again then distributed among Hales and his co-conspirators.
For both properties, it is alleged that Hales used false appraisal values, false income statements, and false claims of renovations to the properties to obtain the inflated loans, the indictment alleges.
