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4 plead not guilty in Des Moines 'flipping' case

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News,Business,Crime,Iowa

DES MOINES, Iowa (AP) — A lawyer and three businessmen have pleaded not guilty to bank fraud charges in connection with an alleged homebuying scheme in the Des Moines area.

Attorney Jason Springer, mortgage broker Jerod Hogan, real estate agent Rick Makohoniuk and business owner Patrick Steven were arraigned Friday in federal court in Des Moines. A fifth defendant, Nathan Smith, is expected to appear for a plea hearing Aug. 29.

An indictment alleges that Smith and Steven had a company that negotiated short sales with lenders on behalf of struggling homeowners. Smith and Steven purchased the homes in the sales and immediately resold them for a profit, without the lenders' knowledge.

All five are accused of taking steps to deceive lenders into believing the price of the short sales was the fair market value.

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