Is Wholeslaing a shortsale Illegal? Federal Indictment included.

[Kris Haskins]

Ok, so I'm reading an indictment from the feds on some guys that bought a shortsale from a bank, then wholesaled it the same day for a profit.  Can I pls get some feedback on whether this is getting some attention as being Illegal?  Here is the full indictment 

http://mortgagefraudblog.com/wp-content/uploads/20...

Seems like these guys may have done some extra things other than just wholesaling a shortsale.  But is it fraud to negotiate a low offer with a bank, then sell the same house for a profit?