Keith Austin, Ringleader of $14.5 Million Straw-Buyer Mortgage Scheme, Pleaded Guilty Mid-Trial; Resentenced to 121 Months

Case from 2013–2023 (U.S. Attorney's Office release: Sept. 25, 2013; later developments are from court records and other sources cited below). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Keith Austin of Broadview controlled companies called Icy Investments Inc. and Kesha & Icy Investments Inc. In September 2013 he was indicted with nine others, five of them licensed loan originators, in a scheme that prosecutors said obtained about 52 residential mortgage loans totaling at least $14.5 million through straw buyers. The properties were mostly on Chicago's West and South sides. The U.S. Attorney's Office for the Northern District of Illinois announced the charges [1]. Lenders lost more than $8 million.

Outcome: Austin was the only defendant to go to trial. On the sixth day, April 22, 2015, he pleaded guilty to bank fraud, aggravated identity theft and obstruction of justice. His nine co-defendants all pleaded guilty, according to the Seventh Circuit [2]. He was first sentenced to 144 months. After the appeals court vacated that sentence, he was resentenced to concurrent 97-month terms plus a consecutive 24-month term, for 121 months in all [3]. This article covers Austin only. We have not reviewed the individual sentences of his co-defendants.

How the scheme worked

According to the indictment [1]:

1. Sellers recruited: Austin and others recruited property owners to sell their homes, knowing the sale prices would be inflated so they could take the extra loan proceeds.
2. Straw buyers recruited: Buyers were promised they wouldn't need any of their own money, would be paid to attend closings, and wouldn't have to make mortgage payments.
3. Fraudulent loans: Loan originators allegedly qualified the straw buyers with false information, and the proceeds went to Austin and others.
4. Obstruction: Prosecutors charged that Austin and two loan originators prepared false documents in response to federal grand jury subpoenas issued in 2012.

When the loans weren't fully recovered through sale or foreclosure, lenders lost more than $8 million.

The sentence and appeals

Keith Austin, 41 at indictment, Broadview

• Plea: an oral "blind" plea, with no plea agreement, on April 22, 2015, to one count each of bank fraud, aggravated identity theft and obstruction of justice. The government dismissed the remaining counts [2].
• First sentence: 144 months, against a guideline range of 188 to 235 months, imposed by U.S. District Judge Charles R. Norgle [3].
• Appeal: On Oct. 29, 2018, the Seventh Circuit upheld the guilty plea but vacated the sentence and sent the case back so restitution and related loss issues could be recalculated (907 F.3d 995) [2].
• Resentencing: concurrent 97-month terms plus a consecutive 24-month term. The 24-month term is the mandatory consecutive sentence for aggravated identity theft.
• Habeas petition: On Aug. 29, 2023, Judge Virginia M. Kendall rejected Austin's later motion under 28 U.S.C. § 2255, which claimed ineffective counsel, actual innocence and vindictive prosecution [3].

The FBI and the HUD Office of Inspector General investigated.

Red flags for would-be straw buyers

• "You won't need any money and you won't have to make payments."
• Being paid to attend a closing or to put a house in your name.
• Sale prices well above what the seller expected, with the difference going elsewhere.

What to do

1. Walk away from any deal that pays you to borrow. Straw buyers can be prosecuted and are left owing the debt.
2. Check loan originators on nmlsconsumeraccess.org.
3. Report mortgage fraud to the FBI at tips.fbi.gov or the HUD OIG hotline at hudoig.gov/hotline.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Keith Austin, Broadview	N.D. Ill. (Judge Norgle), 13 CR 761; 7th Cir. No. 16-3211	Pleaded guilty mid-trial April 22, 2015; sentenced to 144 months; vacated Oct. 29, 2018; resentenced to 97 months concurrent plus 24 months consecutive; § 2255 motion rejected Aug. 29, 2023	[2], [3]

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Ten Defendants Indicted In Alleged $14.5 Million Mortgage Fraud Scheme That Resulted In $8 Million Loss To Lenders," Sept. 25, 2013. https://www.justice.gov/usao-ndil/pr/ten-defendants-indicted-alleged-145-million-mortgage-fraud-scheme-resulted-8-million
2. U.S. Court of Appeals for the Seventh Circuit, United States v. Keith Austin, No. 16-3211, 907 F.3d 995, Oct. 29, 2018. https://www.govinfo.gov/content/pkg/USCOURTS-ca7-16-03211/pdf/USCOURTS-ca7-16-03211-0.pdf
3. U.S. District Court, N.D. Ill., Austin v. United States, No. 20 C 6133, memorandum opinion and order, Aug. 29, 2023 (via vLex). https://case-law.vlex.com/vid/austin-v-united-states-942129009

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