South Hills pair charged with cheating federal housing program by flipping foreclosed homes

A pair of South Hills residents are accused of cheating the federal government by posing as the would-be owner-occupant of a foreclosed home, only to attempt to flip the property for profit.

A federal grand jury accused J. Reed Pirain, 45, and Renee Vasilko, 48, both of Upper St. Clair, of having “knowingly and willfully conspired to defraud” the Department of Housing and Urban Development, Acting U.S. Attorney Stephen R. Kaufman said.

The three-count indictment cites counts of conspiracy, fraud and falsifying federal documents.

Prosecutors said that from February 2018 through March 2019, Pirain and Vasilko lied on falsely certified bidding forms submitted to HUD’s Single Family Property Disposition Program “in an effort to jump the line ahead of other real estate investors.”

The program enables individuals to buy a home from the federal government following foreclosure on a Federal Housing Administration loan. The goal is to promote homeownership by families who intend to reside in the homes they buy by allowing them to bid before real estate investors seeking to churn a short-term profit.

The indictment said Vasilko committed to occupying a foreclosed home made available through the program “when, in fact, Pirain and Vasilko intended to flip the home for profit,” prosecutors said.

“This unlawful abuse of the Single-Family Property Disposition program has two effects that frustrate the program’s purpose: first, it can allow real estate investors to potentially outbid families who otherwise would purchase the home and reside in the community,” Kaufman said in a statement. “Second, it allows real estate investors to jump the line and bid on foreclosed homes before other investors are eligible.”

If convicted on all counts, each defendant faces up to five years in prison and a fine up to $250,000, according to Kaufman.