Leader of Mortgage Fraud Scheme Sentenced

An Akron man was sentenced to 10 years in prison for leading massive mortgage fraud schemes in Ohio and Florida, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

U.S. District Judge John Adams called Jack R. Coppenger an “economic predator” before issuing his sentence, a news release said.

Adams will determine the amount of restitution Coppernger, age 50, must pay later this year. The government has asked for $35 million.

More than 40 people, including a Fairlawn man, have been found guilty of crimes for their various roles in the mortgage fraud, which has led to losses of more than $36 million.

Coppenger previously pleaded guilty to two counts of conspiracy, including bank fraud in Panama City, FL, and defrauding the IRS in 2006 by concealing funds he  received from a land “flip” conducted by Andrew Norman and Jason Herceg of Fairlawn.

Norman and Herceg were both recently sentenced to 40 months in prison and ordered to pay $14 million in restitution.

According to court documents, they operated a company in Stow under the name of V.P. Equity LLC and, with Coppenger, procured “straw buyers” and submitted false loan documents to banks to purchase Coppenger’s lots in Florida (which had already been inflated in value as part of a land flip) in a mortgage fraud scheme.

Coppenger, with assistance from Herceg and Norman, perpetrated a large mortgage fraud scheme involving numerous straw buyers primarily from the Akron, Hartville, and Mentor areas. 

These straw buyers essentially sold their good credit scores to Coppenger in order for Coppenger to secure loans, through straw buyers’ names, for properties in Florida. Coppenger promised the straw buyers that if they signed the loan application and paperwork, Coppenger would pay them an inducement amount.

Coppenger then promised the straw buyers that he would make all the mortgage payments for the property and would make any down payments that were necessary, and that, once the property was developed and sold, they would split the profits equally.

Ultimately, Coppenger failed to make the mortgage payments on these loans, resulting in a loss of approximately $36 million, according to court documents.

Herceg and Norman defrauded two elderly purchasers by selling them a Florida property for $7 million. Moments before this sale, Herceg and Norman bought the property through their partnership, 104 Investments, from the original seller and inflated its value by approximately $2.6 million. 

Herceg and Norman then sold this property to these elderly purchasers, who were never told of the last minute “flip,” or that they were actually buying the land from Herceg, Norman, and 104 Investments. 

Herceg and Norman, and their 104 Investments business partner, Robert Jason Workman, received approximately $2.6 million from this sale. They then funneled portions of the proceeds out to themselves, including $690,000 to Coppenger as payment for locating the property. 

Subsequently, Norman, Herceg, and Workman fraudulently deducted the money they gave to Coppenger as a business expense.