Federal, state and local authorities received warnings, some dating back two years, about the Fishers man at the heart of a mortgage fraud lawsuit involving the foreclosure of scores of Indianapolis-area homes.
Yet the operation continued, according to court documents and observers. Homes were sold at inflated prices, defrauding lenders out of tens of millions of dollars and leaving investors on the brink of financial ruin.
Suspicions that something was wrong were so widespread in the real estate community that two title companies sent out notices warning other title companies to be wary about any deals involving Fishers businessman Robert Penn.
He is named as mastermind of the scheme in a lawsuit by Countrywide Home Loans, the largest U.S. mortgage lender.
In the lawsuit filed in Marion Superior Court in June, Countrywide claims Penn and several cohorts tricked dozens of Virginia residents into buying houses and townhomes at inflated prices in Indianapolis and Westfield.
The investors, according to the lawsuit, were led to believe they were participating in a risk-free "investment opportunity." In reality, the suit says, Penn and his associates were taking out home loans in the investors' names, inflating the appraisals and pocketing the difference . . .
What the Star article doesn't reveal is that Penn is not alone in these schemes. I have received countless of calls at my law office over the past two to three years from Marion Co. homebuyers complaining about being the victim of similar schemes. Unfortunately, none of these folks had any money to pay for the costs of litigation. As a sole practitioner, I simply cannot afford to take on cases of this nature without knowing that I'm going to be compensated. However, I urged these folks to contact the local FBI office, the state Attorney General and the Marion Co. prosecutor's office to explain what had happened to them because I believed crimes were being committed.
I also personally represented a homeseller in a case that was filed last year in Marion County Superior Court by First Horizon Home Loan Corporation against a mortgage broker accused of wide-scale mortgage fraud. First Horizon alleged that 4M Financial Services d/b/a Marquis and its principal, Robert Turner, had in nine transactions in Indianapolis engaged in mortgage fraud and had "depended on the vulnerability of and ignorance of Hispanic immigrants to carry out their fraudulent deeds." [Note: those are the words of the First Horizon's attorneys; I would not have described Hispanic immigrants as ignorant]. My client and his wife were wrongly accused by First Horizon of conspiring with Marquis and Turner to commit fraud. First Horizon eventually dismissed the complaint against my client and his wife after it reached a settlement agreement with Marquis and Turner.
At the time that lawsuit was initially filed, the plaintiff's attorney, Abraham Murphy, communicated to me that Marquis and Turner were being investigated by the Secretary of State's office and local prosecutors. I did not independently confirm whether these parties were being investigated for any crimes, but this lawsuit confirmed in my mind just how wide-scale mortgage fraud is in Marion County. I was shocked by the lack of safeguards exercised by First Horizon to prevent the fraud from happening in the first place. Employment verification forms were not being independently confirmed, and it had failed to confirm a buyer's employment with recent tax returns, W-2s and paycheck stubs. If the mortgage lenders were doing their jobs properly, guys like Penn and Turner could not engage in these questionable transactions.
I think the Star is right to question where the responsible government authorities were in looking out for the public's interest. I think if the truth is told, you will find that the FBI, the Attorney General, the Secretary of State, the Marion Co. Prosecutor and the Mayor Bart Peterson's office have all received numerous complaints over the past two to three years about this serious problem. Unfortunately, everyone involved here appears to have looked the other way.