SPRINGFIELD -- A Baptist church pastor and two other men face federal charges of running an alleged real estate fraud ring that duped lenders and homebuyers out of $1.5 million.
The Rev. Paul J. Starnes, 39, leader of Morning Star Church, was arrested by federal agents Friday. Starnes, Marc Brown, 45, and David McCoy, 42, all of Springfield, were indicted Thursday by a federal grand jury on charges of wire fraud and money-laundering conspiracy.
The indictment, unsealed Friday, alleged that Starnes formerly owned Trinity Mortgage Brokerage Inc. and was a partner in Trinity Land Co., which purchased and sold properties in the Springfield area.
Brown and McCoy were brokers at the mortgage company, according to the indictment.
The trio is accused of ''land-flipping," a practice that typically involves buying depressed properties, paying off appraisers to inflate their values, recruiting poor, first-time buyers, and drafting phony financial documents to obtain mortgages.
While people involved in the deals see a profit, the new homeowners often default on the mortgages.
According to the indictment, the buyers were promised money back at the closings, or repairs on the homes that never happened.
The men were released on bail Friday and are scheduled to be arraigned in US District Court next week. None had a lawyer present.
Starnes faces up to eight years in prison if convicted. McCoy faces a maximum of 12 years and Brown up to eight years.
Prosecutors said all three men used Albert Innarelli as their attorney to sign off on documents critical to the alleged scams.
Innarelli, 46, of Agawam, and nine defendants pleaded not guilty in September to federal charges that they netted about $15 million between 1997 and 2002 using a similar scheme.