Thursday, January 6, 2011  12:49 PM  The Columbus Dispatch

http://www.dispatch.com/live/content/local_news/stories/2011/01/06/06-mortgage-flippers.html?sid=101

A federal judge sent a Fairfield County couple to prison today for a mortgage-flipping scheme that involved homes in Columbus and surrounding suburbs.

Scott M. Gaib, 38, received the longer sentence: 18 months for conspiracy and money laundering. His wife, Erica S. Gaib, 37, will spend a year and a day in prison for money laundering.

U.S. District Judge Gregory L. Frost said he based the sentences on each one's level of involvement in the scheme.

"I have to send a message to the community, a strong message, that we're not going to allow this behavior," Frost said.

The Gaibs pleaded guilty in September after reaching agreements with federal prosecutors. As part of the agreements, 10 other charges against Mr. Gaib and four against Mrs. Gaib were dropped.

An Internal Revenue Service investigation found that the couple and Scott's brother, Wayne Gaib, 40, had ripped off financial institutions by exaggerating the value of real estate they were buying and obtaining loans for that exaggerated amount. Led by Scott Gaib, they would buy the real estate for a lower amount and keep the difference as a kickback.

Kickbacks ranged from $77,772 to $321,127; the total was $1.3 million.

The scam operated from 2005 to 2007. The homes were in Canal Winchester, Columbus, Delaware, Dublin, Powell, Upper Arlington and Westerville.

Mrs. Gaib served as a "straw buyer," signing loan paperwork for purchases. Her husband worked with a mortgage company on the purchases.

Wayne Gaib, of Canal Winchester, was sentenced in October to one day in prison and a year and a day in Alvis House on one count of money laundering. Alvis House is a halfway house.