Urbana, Ill. - A Decatur, Illinois man, Gary Knox, 61, who falsely represented himself as a licensed real estate broker in a broad “flipping” scheme was sentenced today to a term of 235months (19 years, 7 months) in federal prison, as announced by Rodger A. Heaton, U.S. Attorney for the Central District of Illinois. Chief U.S. District Judge Michael P. McCuskey,who presided at today’s hearing, scheduled an additional hearing on May 8, 2008, to determine restitution to be paid to victims of the scheme.

Knox and two co-defendants, Frank Kelly Ciota, 47, of Riverton; and Dennis Wiese, Jr.,39, of Belleville, Illinois, each pled guilty to their respective roles in the scheme. Ciota is scheduled to be sentenced on March 12; Wiese is scheduled for sentencing on May 2, 2008.

The scheme, which began in 1999 or before, and continued into 2005, involved more than 150 fraudulent real estate sales and financing transactions of more than $8 million in Springfield and Decatur, Illinois. Knox represented himself and his business, Central Illinois Management and Development Company, as being in the business of buying, selling and managing real estate; however, he was not a licensed real estate broker or salesperson. Knox and Ciota obtained more than $3 million for their personal use and to promote the ongoing scheme while Wiese received fees of $350 to $450 per appraisal.

The three men admitted engaging in a practice known as “flipping,” which involved making false representations, including fraudulent real estate appraisals by Wiese and used by Knox and Ciota to entice owners to sell, buyers to purchase, and lenders to finance rental properties that were sold at prices they had fraudulently inflated to substantially higher than their reasonable value. Knox and Ciota admitted that over the course of the scheme they converted more than $3 million in profits for their personal use and to promote the ongoing scheme.

The case was investigated by the Federal Deposit Insurance Corporation’s (FDIC) Office of Inspector General, Western Region; the U.S. Postal Inspection Service, Chicago Division; and the Federal Bureau of Investigation, Springfield Division. The Illinois Department of Financial and Professional Regulation, Division of Banks and Real Estate, also provided assistance in the investigation. Assistant U.S. Attorney Timothy A. Bass is prosecuting the case.

Knox pled guilty to three counts of bank fraud; one count of wire fraud; six counts of mail fraud; and one count of conspiracy to commit money laundering.