Indy landlord Bert Whalen lived lavishly. Now he's pleading guilty to defrauding investors

An Indianapolis real estate investor who owned or managed hundreds of troubled rental properties across the city pleaded guilty to a fraud charge in federal court Tuesday, the Department of Justice announced.

Herbert "Bert" Whalen, 47, made the plea during a video conference. The charge of conspiracy to commit wire fraud carries a maximum potential sentence of 20 years in prison and a fine of up to $250,000 or twice the gross loss or gain caused by the offense, whichever is more.

Whalen preyed on "innocent victims’ desire to improve their own financial position through what they thought were sound investments,” Philip R. Sellinger, U.S. Attorney for the District of New Jersey, said in a statement.

The statement called the crime part of a "Ponzi scheme" to defraud investors nationwide, including in New Jersey.

"These misrepresentations and others led to millions of dollars in losses to investors, which Whalen used to, among other things, fund his lifestyle," the statement said.

Whalen's attorney, John Tompkins of Indianapolis, said his client is "glad to be moving forward and getting this episode of his life behind him."

Whalen was indicted following an IndyStar investigative series in 2019 that examined his association with Clayton Morris, a former "Fox & Friends" co-host who left the show to promote his real estate investment business.

Investors told IndyStar that Whalen and Morris misled them. People living in the homes Whalen owned or managed were routinely forced to endure deplorable conditions while he lived a lifestyle of luxury. It included a home on Geist reservoir once owned by former Gov. Mitch Daniels and a yacht in Florida.

Morris has not been charged with a crime and was not named in the indictment or the statement from the U.S. Attorney's office.

Whalen and Morris are also the subject of a pending civil lawsuit brought by the Indiana Attorney General's Office. David Hensel, an attorney for Morris, declined to comment on either case.

Federal prosecutors said Whalen, who operated Oceanpointe Property Management in Indianapolis, concealed poor conditions at properties the company managed and failed to make promised repairs. He and an unnamed conspirator created fake leases for unoccupied homes to make it seem to investors that the properties were occupied and generating income for investors, prosecutors said.

When investors asked to see the homes, "Whalen directed employees to cover the windows to conceal the poor condition of the properties and the fact that the properties remained vacant," according to the U.S. Attorney's office.

"Whalen and others commingled tenant rent payments and selected which investors would be paid from the pool of funds in order to silence investors who voiced concerns and evade detection of the fraud."

Prosecutors also alleged Whalen directed an employee to create a false identity online and falsely claim Oceanpointe had addressed all concerns regarding an investment property.

Sentencing is scheduled for July 14.

Contact Tim Evans at 317-444-6204 or tim.evans@indystar.com. Follow him on Twitter: @starwatchtim.

Contact IndyStar reporter Tony Cook at 317-444-6081 or tony.cook@indystar.com. Follow him on Twitter: @IndyStarTony.

This article originally appeared on Indianapolis Star: Indianapolis landlord Bert Whalen pleads guilty in federal fraud case