A housing developer who had a hand in rehabilitating two low-income developments in Perry has been charged with fraud.

Jeffrey W. Voorhees allegedly created a false pass-through company in order to artificially inflate loans to rehabilitate seven properties across Iowa. He acted through his own consulting company and a not-for-profit entity and purchased the properties to form Candleridge VII, LLC. According to the Dallas County Assessor, the housing developments located at 912 18th Street and 2620 McKinley Street in Perry are both owned by Candleridge.

The company bought the properties in 2012, using a direct loan from the United States Department of Agriculture, which also provided a guarantee for a private bank loan for the rehabilitation. Voorhees then employed a general contractor for the development in Brian L. Pittman, who has also been charged in the scheme. Together, they allegedly artificially inflated construction costs and created a pass-through company called Rural Construction Services (RCS). This allowed them to obtain nearly $700,000 in inflated loan proceeds.

The USDA has strict regulations for the use of loans, and the indictment alleges that Voorhees knew the rules and broke them to turn a profit from the programs. Voorhees and Pittman are each being charged with five counts of wire fraud affecting a financial institution. Each charge carries a sentence of up to 30 years in prison. Voorhees is additionally being charged with three felony counts relating to moving the profits of RCS into bank accounts in his wife’s name, each count carrying 10 year prison sentences.

The USDA Office of Inspector General conducted the investigation, and the case will be prosecuted by the United States Attorney’s Office.