Man Sentenced for Defrauding Bank

Allison Tussey —  July 1, 2011 — 1 Comment

Richard Wayne Hope, 53, Denham, Louisiana, formerly of Hagerstown, Maryland, was sentenced by U.S. District Judge William M. Nickerson to 30 months in prison, followed by three years of supervised release, for conspiracy to commit bank fraud in connection with a $1.75 million loan he obtained on behalf of a company. Judge Nickerson also ordered Richard Hope to pay restitution to the bank of $1.5 million.

According to his plea agreement, Richard Hope and his brother, Otis Hope, the senior pastor for Montrose Baptist Church located in Rockville, Maryland, formed a “religious company” called Shiloh Ministries of Hagerstown, Inc. (Shiloh). The company operated the Shiloh Conference and Retreat Center in a building that Shiloh owned at 149 North Potomac Street, Hagerstown. The company renovated and maintained the building, and leased the space to groups for conferences and retreats.

On June 21, 2006 the building was significantly damaged by a fire. The fire marshal and building inspector advised the Hopes that no one could occupy the building until numerous code violations were corrected and an occupancy certificate from the fire marshal was obtained.

According to former employees of Shiloh and other witnesses, Shiloh stopped conducting business and no more conferences or retreats were ever held after that date. Insurance proceeds went directly to a fire remediation company and to Kabel Company, a construction company associated with the Hopes, which had been incorporated about a month after the fire, for repairs allegedly made to the building.

In September 2006, the Hopes applied to a bank for a commercial loan in the amount of $1.75 million to refinance the mortgage and to release approximately $175,000 being held in escrow by the previous lender for renovations made to the building prior to the fire. The brothers engaged a mortgage broker to assist with the refinancing. Richard Hope falsely represented to the broker that Kabel Company repaired the damage caused by the fire, and that Shiloh was open for business and holding conferences and retreats again. In fact, Shiloh never reopened for business after the fire. A city inspection revealed numerous code violations, and found wires that were unattached to new electrical outlets or to an inoperable sprinkler system. Additionally, beginning in October 2006, the monthly utility payments were not paid. A sole occupant of the building was ejected a few months later because the building was deemed uninhabitable. The Hopes never asked the city to inspect the renovation work purportedly performed by Kabel Company so that Shiloh could obtain an occupancy permit, nor did they ever bring the building up to code.

Based on the misinformation provided by the Hopes, the bank mailed Otis Hope an initial commitment letter to fund the loan and asked for Shiloh‘s past and current financial statements before making a final commitment. Richard Hope submitted fraudulent financial statements to the bank overstating the company’s assets and monthly cash flow, and falsely reflecting five months of operations during which time the business was in fact not operating. Richard Hope submitted a phony letter from a certified public accountant purporting to attest that the accountant had compiled the financial statements, when in fact Richard Hope had created the statements. Richard Hope also supplied the bank with a bogus corporate resolution giving him authority to borrow $1.75 million. The resolution purported to be signed by an individual identified as “secretary,” who in fact was not a company officer and had not signed the document.

Relying on the misrepresentations, on February 28, 2007 the bank loaned $1.75 million to Shiloh. Neither the Hopes nor anyone else from Shiloh ever made a monthly loan payment to the bank. The Hopes refused to respond to the bank’s correspondence and phone calls. Thereafter, the Shiloh building was abandoned and went into foreclosure. The bank suffered a $1.5 million loss after it sold the building at auction.

Otis Ray Hope, 55, Aiken, South Carolina, formerly of Hagerstown, Maryland, pleaded guilty to tax evasion, subscribing to a false document in connection with the filing of a federal tax exemption for Shiloh Company, and to conspiracy to commit bank fraud in connection with the $1.75 million bank loan obtained on behalf of Shiloh Ministries. Otis Hope was sentenced to 37 months in prison and ordered to pay restitution of $2,422,320.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
Richard A. McFeely, FBI Special Agent in Charge said, “Mortgage fraud has caused severe and lasting damage to banks, homeowners, and our economy. This sentence underscores the FBI’s commitment to tracking down those who cheat the system so that they may be held accountable.”

“Bank fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities. IRS-Criminal Investigation is always ready to work with our law enforcement partners and lend its financial investigative expertise to investigations like this one” said Acting IRS Special Agent in Charge Jeannine Hammett.

United States Attorney Rod J. Rosenstein thanked the FBI and the IRS – Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Martin J. Clarke and Sujit Raman, who prosecuted the case.

Allison Tussey

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One response to Man Sentenced for Defrauding Bank

  1. Gary Crabtree, SRA July 6, 2011 at 5:59 pm

    Leviticus 19:11.

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