A 66-year-old Indiana man has received a sentence of over three years in federal prison after pleading guilty to a bank fraud charge related to a mortgage scheme in Chicago. The scheme defrauded financial institutions of more than $1.5 million, authorities said.
Lee Holliday of Schererville, Indiana, was implicated in a fraudulent scheme between 2011 and 2012, focusing on West and South Side Chicago properties. According to a plea agreement, Holliday organized a network of buyers, funding their down payments for homes purchased at inflated prices under loans insured by the Federal Housing Authority. After flipping the properties, most buyers were unable to keep up with their mortgages, leading to foreclosure on seven properties.
In her ruling, U.S. District Judge Sara L. Ellis sentenced Holliday to three years and three months in federal prison. The case, laid out by Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois and Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago, revealed that Holliday also committed Covid-relief fraud, unlawfully obtaining nearly $392,000 in Paycheck Protection Program funds. The announcement detailed Holliday’s abuses by the U.S. Attorney's Office.
"FHA loans are intended to help people who could not otherwise afford a home," Acting U.S. Attorney Pasqual said. "In this case, the money that was supposed to help those people and improve their neighborhoods instead went into the defendant’s pockets," he added. Additional comments on the case’s broader implications came from HUD-OIG SAC Jindra: "When people take advantage of HUD-insured mortgage programs, it limits opportunities for hard-working individuals trying to achieve the American dream of homeownership."
The sentence not only reflects the dollar amount defrauded but also the betrayal of public trust and the undermining of systems meant to aid those striving for homeownership.
