The man was alleged to have created a false pass-through company to artificially inflate a loan
.jpg)
Jeffrey Voorhees, a low-income housing developer from Iowa, has been indicted over allegations that he defrauded lenders and the Department of Agriculture by artificially inflating construction costs, the US Attorney’s Office for the Southern District of Iowa announced.
Brian Pittman, the general contractor on the development, is also charged in the scheme with Voorhees.
The indictment claims that Voorhees created a false pass-through company to artificially inflate a loan for the rehabilitation of a housing development located in various towns and cities in Iowa. Acting through his own consulting company and a not-for-profit entity, Voorhees purchased and rehabilitated seven properties.
Voorhees took a direct USDA loan to purchase the properties, which were rehabilitated through a private bank loan that was guaranteed by USDA in the event of default. Along with Pittman, Voorhees created Rural Construction Services, a pass-through company, and artificially inflated construction costs.
Through the scheme, the two obtained about $359,000 in artificially inflated loan proceeds. In addition, Voorhees is alleged to have artificially inflated other costs in the loan to obtain an additional approximately $318,000 in loan proceeds. The loan proceeds were to be repaid using USDA-subsidized tenant rents.
The two men face five counts of wire fraud affecting a financial institution. Each count is punishable by up to 30 years in prison. Voorhees faces an additional three felony counts relating to allegedly moving the profits of the pass-through company into bank accounts in his wife’s name. Each count is punishable by up to 10 years in prison.
