Gary Penrod, who runs Penrod Homes in Greenwood, Mo., has been charged in a 22-count federal grand jury indictment that he caused banks and mortgage companies to lose $4.5 million, reports James Dornbrook of the Kansas City Business Journal.
Penrod, who runs Penrod Homes Inc., is accused of lining up unsophisticated or insider buyers for the homes he built, offering them kickbacks to use for closing costs, down payments or mortgage payments. Penrod is accused of using real estate and mortgage brokers — including Diane Hastings who pleaded guilty to loan application fraud in July 2015 — to submit false documents that concealed the kickback payments from the lenders, causing them to believe the buyers were using their own money. The scheme also allegedly involved submitting applications that falsely overstated buyers' income, assets and intent to actually live in the home.
Shortly after the sale of the homes, Penrod is accused of delivering about $1.5 million in kickback checks to the buyers, labeling them as consultation fees, builder rebates, share of profits or materials. None of these payments were reported to the lenders.