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Sham Decatur Real Estate Agent Plead Guilty To $8 Million Real Estate Scheme

The United States Attorney for the Central District of Illinois, Rodger A. Heaton, announced that Gary Knox, 60, of Decatur, and Dennis Wiese Jr., 38, of Belleville, Illinois, entered pleas of guilty today for their respective roles in an $8 million-dollar real estate “flipping” scheme in Decatur and Springfield. Chief U.S. District Judge Michael P. McCuskey scheduled sentencing for Knox and Wiese on August 29, 2006. A third defendant, Frank Kelly Ciota, age 45, of Riverton, Illinois, pled guilty on Monday, April 17, 2006, and is scheduled for sentencing on August 4, 2006.

The scheme, which began in 1999 or before, and continued into 2005, involved more than 150 fraudulent real estate sales and financing transactions in Springfield and Decatur, Illinois. Knox, Ciota and Wiese admitted engaging in a practice known as “flipping,” which involved making false representations, including fraudulent real estate appraisals by Wiese and used by Knox and Ciota to entice owners to sell, buyers to purchase, and lenders to finance rental properties that were sold at prices they had fraudulently inflated to substantially higher than their reasonable value. As a result, as admitted by Wiese, who was a licensed Illinois real estate appraiser at the time, he received fees of $350 to $450 per appraisal. Knox and Ciota admitted that over the course of the scheme they converted more than $3 million in profits for their personal use and to promote the ongoing scheme.

The case was investigated by the Federal Deposit Insurance Corporation's (FDIC) Office of Inspector General, Western Region; the U.S. Postal Inspection Service, Chicago Division; and the Federal Bureau of Investigation, Springfield Division. The Illinois Department of Financial and Professional Regulation, Division of Banks and Real Estate, also provided assistance in the investigation. The government is being represented by Assistant U.S. Attorney Timothy A. Bass.Read more at usdoj.gov

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