Prosecutors declined to answer questions about the case. Edwin Wall, a Salt Lake City attorney appointed by the court to represent Hales, said only that it was too early in the case to comment.
Concerning the Lindon property, the indictment alleges that Hales, in collaboration with a loan representative at Finance America, found straw buyers whose income was greatly inflated and debts understated on the loan application. In addition, another unindicted co-conspirator formed a company that filed a lien on the property for $194,000 to give the false impression that that amount represented work done to improve the property. A third unindicted co-conspirator issued a false appraisal.
From the inflated loan, the straw buyers received $93,000 and Hales received almost $100,000, part of which he used to pay a kickback to one of the other people involved.
For the Mill Creek area property, Hales also allegedly used a straw buyer, a false appraisal and false information on loan documents to obtain loans of $750,000 for a house that had been sold in a foreclosure sale just two months earlier for $482,000.
Hales then turned around and sold the property to a straw buyer in conjunction with employees of a California company for $1 million, $250,000 more than the price he paid for it 10 months earlier and about $500,000 more than the price that was paid a year earlier.
Proceeds went to 10 entities or people, the indictment says, and one co-conspirator purchased a Porsche with some of the money.
Hales faces up to 30 years in prison on the charges.
The investigation was concluded by agencies involved with the Utah Mortgage Fraud Task Force.