Archives For Maryland

Samuel R. VanSickle, 51, Accident, Maryland, pleaded guilty to conspiring to commit bank fraud arising from three fraudulent bank loans in which VanSickle received proceeds from the sale of real property in Garrett County, Maryland, and Cheat Lake, West Virginia, totaling over $5.7 million.

VanSickle and co-defendant Louis W. Strosnider, III, 49,  Oakland, Maryland, owned and developed property in Garrett County, Maryland. VanSickle used a number of different business names, including Freedom Church, Gospel Church, Equity Exchange, Unity Mortgage, Impartial Lenders, and Noble Forest Consultants, and aliases including “Donald Blunt,” “Jacob Aiken,” “Allen Helms,” and “Paul Walsh.”  Strosnider operated Stony Brook Development Company, located in McHenry, Maryland.

According to his plea agreement, from December 2001 to May 2005, VanSickle conspired with Strosnider for Strosnider to fraudulently obtain real estate loans from banks in connection with the purchase of properties controlled through aliases by VanSickle.  VanSickle concealed from the lenders his role as seller of the properties and recipient of the sales proceeds through fictitious identities such as “Donald Blunt, Trustee for Gospel Church,” “Donald Blunt, Trustee for Freedom Church,” “Equity Exchange,” “Unity Mortgage,” “Jacob Aiken” and “Allen Helms.” The scheme also involved fictitious down payments, inflated collateral, and false contracts.

For example, in 2002, VanSickle provided $600,000 for the purchase of Red Run, a restaurant and bed and breakfast which bordered on Deep Creek Lake in Garrett County, Maryland.  In April 2003, VanSickle caused Red Run to be transferred for $0 to “Donald Blunt, Trustee for Gospel Church” – a fictitious church with a fictitious trustee.  In February 2004, Strosnider signed a contract to buy Red Run from Gospel Church for $3 million.  The contract recited a fictitious $750,000 down payment.  Strosnider applied to a bank for a loan to complete the purchase of Red Run.  When the bank required additional collateral, VanSickle supplied a timber contract for land in Garrett County with a valuation signed by “Paul Walsh” of “Noble Forest Consultants.”  Both “Noble Forest Consultants” and “Paul Walsh” were fictitious.  The settlement for the sale of the property was conducted by attorney Angela Blythe, 52, Oakland, Maryland.  Blythe failed to collect Strosnider’s funds to close the loan.  At VanSickle’s direction, Blythe paid over the sales proceeds of $1.6 million to “Unity Mortgage,” which was VanSickle.  “Unity Mortgage” did not, in fact, have a mortgage on Red Run.Strosnider and VanSickle used similar fraudulent methods in Strosnider’s purchase from VanSickle of 5.87 acres on State Park Road, bordering Deep Creek Lake, and 116 acres of undeveloped land on Cheat Lake, West Virginia.

VanSickle received over $5.7 million in sales proceeds from the fraudulent transactions.   Strosnider defaulted on all three loans. As a result of the scheme, the loss to the financial institutions was $2,755,102.50, the amount of the loans minus the recovery from foreclosure and sale of the collateral. VanSickle has agreed to forfeit and pay restitution in that amount, and forfeit his interest in 40 properties held in VanSickle’s name or in the names of nominees in Maryland, West Virginia and Pennsylvania, up to the value of $2,755,102.50.

VanSickle faces a maximum sentence of 30 years in prison for the conspiracy.  U.S. District Judge Marvin J. Garbis scheduled sentencing for March 17, 2016, at 9:30 a.m.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.

Strosnider previously pleaded guilty to his participation in the conspiracy and awaits sentencing. In a related case, Blythe was convicted by a federal jury on October 9, 2015, after a nine day trial, of conspiring with VanSickle to commit bank fraud, bank fraud, and two counts of making a false statement to a bank.  U.S. District Judge William D. Quarles sentenced Blythe to a year and a day in prison, and entered an order requiring Blythe to forfeit $696,517 and pay restitution of $948,203.25.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorney Joyce K. McDonald and Philip A. Selden, who are prosecuting the case.

Angela M. Blythe, attorney, 52, Oakland, Maryland, was sentenced to a year and a day in prison, followed by three years of supervised release, for conspiring to commit bank fraud, bank fraud and two counts of making a false statement to a bank.  Blythe was also ordered to forfeit $696,517 and pay restitution of $948,203.25. Blythe was convicted by a federal jury on October 9, 2015, after a nine day trial

Blythe was an attorney licensed to practice in Maryland and West Virginia, with an office in Oakland, Maryland.  She was a settlement attorney in real estate transactions.            Continue Reading…

Max Wagenblast, 35, Arlington, Virginia, was sentenced to two years in prison, followed by three years of supervised release, for wire fraud in connection with a scheme to steal over $5 million from his company. Wagenblast was also ordered to pay a fine of $25,000.

According to the his plea, Wagenblast was employed as an asset manager for a Bethesda company (the company) that was the second largest Special Servicer of commercial real estate mortgages in the United States. As a Special Servicer, the company was responsible for administering defaulted commercial mortgage loans and the real estate securing foreclosed loans. The company performed this service on behalf of the REMIC trust that held the mortgage loans on behalf of the certificate holders of the trust. In its capacity as a Special Servicer, the company collected borrower payments and property cash flow and remitted them to the REMIC trust, which was responsible for distributing those funds to the certificate holders. Wagenblast oversaw both the loans and properties that acted as security for the loans serviced by the company, including the application and utilization of funds generated by the properties he managed. Continue Reading…

David B. Pick, loan originator, 47, Bowie, Maryland, pleaded guilty to making false statements arising from a real estate closing.

Pick was a loan originator responsible for preparing loan applications, obtaining documentation to support the representations in loan applications, presenting loan applications to financial institutions for funding and working with financial institutions to close loans.

In 2005, Pick sought a $900,000 construction loan from a mortgage lender to purchase and construct a residence at 1206 Tilghmans Landing Way, Annapolis, Maryland.  The residence was to be constructed by Richland Homes, Inc., owned and operated by Timothy Ritchie, 44, Annapolis, Maryland .  Continue Reading…

Angela M. Blythe, attorney, 51, Oakland, Maryland, was convicted by a federal jury of conspiring to commit bank fraud, bank fraud and two counts of making a false statement to a bank.  Blythe was an attorney licensed to practice in Maryland and West Virginia, with an office in Oakland, Maryland.  She was a settlement attorney in real estate transactions.

According to evidence presented at the nine day trial, from 2000 to 2006, Blythe prepared deeds, mortgages and notes using false identities provided by her co-conspirator.  Blythe recorded those fraudulent documents in Garrett County, Maryland and Preston County, West Virginia, which concealed her co-conspirator’s ownership of the properties.  On at least seven occasions, Blythe also conducted property settlements in which her co-conspirator participated as buyer, seller and/or borrower using the false identities, which Blythe concealed from the lenders. Blythe failed to conduct the settlement transactions as described on the settlement statements and paid over the seller’s proceeds as her co-conspirator directed. Continue Reading…

 Timothy L. Ritchie, 44, Annapolis, Maryland, pleaded guilty to making false statements arising from a real estate closing.

Ritchie owned and operated Richland Homes, Inc., and was in the business of building, purchasing and selling homes.

According to his plea agreement, on July 7, 2005, Ritchie attended a residential closing for his purchase of three lots located at 24058 St. Michael’s Road, St. Michael’s, Maryland.  John L. Davis, 55, real estate agent, Chestertown, Maryland, conducted the closing, and listed Ritchie on the HUD statement as the buyer/ borrower.  The HUD statement falsely stated that Ritchie provided $1,153,937.23 in cash at the closing.  In fact, Ritchie did not provide any funds to Davis at the closing. As a result of the false statement, Ritchie fraudulently obtained approximately $2,445,102 from a mortgage lender by wire transfer to fund the settlement.

Ritchie faces a maximum sentence of five years in prison.  U.S. District Judge Richard D. Bennett scheduled his sentencing for January 14, 2016, at 10:00 a.m.

John L. Davis previously pleaded guilty to conspiracy to commit mail fraud and wire fraud arising from his participation in the scheme, and awaits sentencing. Davis admitted that the loss arising from his participation in the scheme is between $400,000 and $1 million.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; and Special Agent in Charge Fran Mace, of the Federal Deposit Insurance Corporation Office of Inspector General.  United States Attorney Rod J. Rosenstein commended the FHFA – OIG and FDIC – OIG for their work in the investigation.  Mr. Rosenstein thanked Special Assistant U.S. Attorney Kevin V. DiGregory and Assistant U.S. Attorney Kathleen O. Gavin, who are prosecuting the case.

Kevin Campbell, 53, Pyesville, Maryland, was sentenced to 19 months in prison followed by five years of supervised release for conspiring to commit mail, wire and bank fraud arising from mortgage fraud schemes resulting in losses totaling approximately $1.2 million and was ordered to pay restitution of $1,182,822.

Jonathan L. Miles, 45, Perry Hall, Maryland to 18 months in prison followed by five years of supervised release for conspiring to commit bank fraud, and entered an order that Miles pay restitution of $1,182,822.

Campbell invested in Baltimore residential real estate, and controlled four companies that bought and sold residential real estate: KMJ Realty LLC; E&W Realty LLC; C Realty LLC; and City Realty LLC. Miles was a loan officer for a mortgage brokerage company formerly located in Reisterstown, Maryland. Continue Reading…

Nine individuals were sentenced on federal charges stemming from a mortgage fraud scheme involving 45 properties and $16 million in mortgage loans used for the purchase of residential real estate in the District of Columbia and Maryland.

The sentencings occurred before the Honorable Reggie B. Walton of the U.S. District Court for the District of Columbia. Defendants include:

  • Edward Dacy, 77, West Melbourne, Florida. He was sentenced on August 6, 2015 to six years in prison. Dacy was found guilty by a jury of 10 counts of conspiracy, bank fraud, and mail fraud. Upon completion of his prison term, Dacy will be placed on three years of supervised release. In addition, Judge Walton ordered that he pay $2,730,345 in restitution and an identical amount as a forfeiture money judgment.
  • Frank Davis, Jr., 49, Washington, D.C. He was sentenced on August 7, 2015 to five years in prison for conspiracy to commit bank fraud. Upon completion of his prison term, Davis will be placed on three years of supervised release. Judge Walton also ordered that Davis pay $2,730,345 in restitution and an amount of $2,296,463 as a forfeiture money judgment;
  • Frederick Robinson, Sr., 52, Montgomery, Alabama. He was sentenced on July 31, 2015 to 27 months in prison for conspiracy to commit bank fraud. Upon completion of his prison term, Robinson will be placed on three years of supervised release. Robinson also was ordered to pay $925,311 in restitution and an amount of $971,900 as a forfeiture money judgment.
  • Lonnie Johnson, 47, Greensboro, North Carolina. He was sentenced on July 15, 2015 to one year and one day in prison for conspiracy to commit bank fraud. Upon completion of his prison term, Johnson will be placed on three years of supervised release. In addition, Judge Walton ordered that he pay $277,000 in restitution.
  • Cheryl E. Morrison, 54, West Melbourne, Florida. She was sentenced on Aug. 5, 2015 to five years of probation for conspiracy to commit mail fraud; she was required to serve 90 days of that time in home detention. She also must pay $42,600 in restitution;
  • Howard Tutman, III, 54, Woodstock, Maryland. He was sentenced on Aug. 4, 2015 to five years of probation for conspiracy to commit bank fraud; he was required to serve 20 weekends in jail. In addition, Judge Walton ordered Tutman to pay $484,370 in restitution and $606,414 in forfeiture;
  • Pauline Pilate, 50, Washington, D.C. She was sentenced on July 16, 2015 to three years of probation for conspiracy to commit bank fraud; she was required to serve eight weekends in jail. In addition, Judge Walton ordered that she pay $1 million in restitution and an identical amount as a forfeiture money judgment;
  • A. Conrad Austin, 49, Bowie, Maryland. He was sentenced on May 15, 2015 to five years of probation for conspiracy to commit bank fraud, mail fraud, and wire fraud; he was required to serve four weekends in jail. In addition, Judge Walton ordered that he pay $5,001 in restitution and an identical amount as a forfeiture money judgment.
  • Anthony Young, 47, Clinton, Maryland. He was sentenced today to five years of probation for conspiracy to commit bank fraud; he is required to serve eight weekends in jail. In addition, Judge Walton ordered that he pay $300,600 in restitution.

Davis and Robinson purchased properties in the names of general partnerships; Davis and Robinson then recruited individuals, or straw buyers, to re-purchase these same properties for higher amounts, funded by fraudulently obtained mortgage loans, by promising the buyers that they would not be required to: make financial contributions toward the purchase of the properties; pay the monthly mortgage payments or expenses; or maintain the properties. These mortgage loans were obtained by fraudulent statements and documents, including false loan applications and real estate contracts, phony cashier’s checks and verifications from banks, fabricated tax returns, and letters from a Certified Public Accountant.

Davis recruited Young, who assisted with recruiting other straw buyers; Pilate, who obtained her real estate license in order to create real estate sales contracts for the straw buyers, and Johnson, a bank employee who assisted in creating false verifications of deposits. In order to obtain mortgage loans in the names of some of the straw buyers, Robinson recruited Austin, a Certified Public Accountant (CPA), to create false CPA letters, inflated tax returns, and unjustified financial statements. Tutman was the loan officer on 14 loans or loan attempts, and knew that the borrowers were merely straw buyers for Davis and Robinson and the loan applications contained inflated salaries.

Morrison worked at the settlement company with Dacy, her husband. The settlement company received the funding from the mortgage lender and should have collected the buyers’ cash contributions; it was under the obligation to disburse the loan money only if all of the mortgage lender’s conditions were met and the buyer’s financial contributions collected. Morrison and Dacy handled the straw buyers’ settlement of the properties, with knowledge that the straw buyers did not pay the cash contribution as required by the lenders.

The sentencings conclude a three-year investigation relating to this mortgage fraud scheme involving the defrauding of banks, mortgage lenders, and the Federal Housing Administration, part of U.S. Department of Housing and Urban Development, of money by obtaining mortgage loans on residential real estate properties through false loan applications and documents and fraudulent settlements. These actions ultimately caused a loss to the banks, lenders, and FHA when mortgages were not paid. Some of the fraudulently-obtained mortgage loans were later resold in the secondary mortgage market to Freddie Mac and Fannie Mae.

In this case, a group of greedy individuals teamed up with a real estate agent, a certified public accountant, employees of a settlement company, and others to carry out a far-reaching scheme that caused millions of dollars in losses to banks and other lending institutions,” said Acting U.S. Attorney Vincent H. Cohen, Jr. “These defendants took money that could have been used to help honest, hard-working people attain the dream of home ownership. They used straw buyers and falsified documents to carry out their long-running fraud. The prosecution in this case demonstrates our resolve to aggressively deal with those who engage in mortgage fraud at the expense of the entire community.”

This was a multi-tiered scheme with multiple individuals playing a role, and every single one of them underestimated the ability and commitment of law enforcement to protect innocent victims and ultimately the taxpayers from mortgage fraud schemes,” said Olga Acevedo, Special Agent in Charge of the Mid-Atlantic Region, Office of the Inspector General, Federal Housing Finance Agency. “We are proud to be a part of the multi-agency effort to hold accountable those who engage in mortgage and bank fraud. FHFA-OIG will continue to carry out this work until all are held accountable.

This sentencing was the result of outstanding investigative work conducted by the HUD OIG, and our law enforcement partners,” said Cary Rubenstein, Special Agent in Charge of the Mid-Atlantic Region of the Office of the Inspector General of the U.S. Department of Housing and Urban Development (HUD-OIG). “This collaborative effort sends a clear message that we will commit the necessary resources to make sure that the fraudsters are brought to justice and are prosecuted to the full extent of the law.”

Even though this $16 million mortgage fraud conspiracy targeted lenders, banks, and the Federal Housing Administration, the result of these criminal actions hurts our entire community,” said Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office. “The FBI will continue to work with our law enforcement partners to ensure that these criminal schemes do not go unpunished.”

In announcing the sentences, Acting U.S. Attorney Cohen, Special Agent in Charge Acevedo, Special Agent in Charge Rubenstein, and Assistant Director in Charge McCabe expressed appreciation for the work performed by the Special Agents and analysts from the Offices of Inspector General of the Federal Housing Finance Agency and Department of Housing and Urban Development and the FBI, who investigated the case. They also expressed appreciation for the work of the U.S. Secret Service and the Offices of Inspector General of the Central Intelligence Agency, the Department of Justice, and Department of Homeland Security, which assisted in the investigation. They acknowledged the efforts of those working on the case from the U.S. Attorney’s Office for the District of Columbia, including Paralegal Specialists Ida Anbarian, Donna Galindo, Corinne Kleinman, Kristy Penny, Tasha Harris, and Heather Sales, former Paralegal Specialist Sarah Reis, and Assistant U.S. Attorneys Anthony Saler, Thomas Swanton, and Arvind K. Lal, who assisted with forfeiture issues. Finally, they commended the work of Assistant U.S. Attorneys Virginia Cheatham and David A. Last, who tried the case against Edward Dacy and handled the plea negotiations with Conrad Austin, and Virginia Cheatham who prosecuted the case.

Anika N. Greene, 42, Bronx, New York, was convicted by a federal jury on charges of conspiracy to commit bank and wire fraud, bank fraud, wire fraud, access device fraud and three counts of aggravated identity theft.

Green was charged in a superseding indicted on July 15, 2014. According to court records and evidence presented at trial, Greene and three other individuals, Jeffrey Washington, Alice Howard, and Catya J. Craig, burglarized Wells Fargo mortgage offices throughout New York, New Jersey, Connecticut and Maryland in 2012 and 2013. The defendants stole over 1,800 mortgage files that were then used in a variety of bank customer impersonation and retail credit fraud schemes, targeting various banks and retailers. Washington recruited individuals to go into banks, impersonate customers and remove funds via setting up business accounts and transferring funds from the accounts of bank customers. Washington and other defendants, including Greene, traveled from New York to the Eastern District of Virginia on multiple occasions throughout 2012 and 2013. Continue Reading…

Edward Dacy, 77, most recently of West Melbourne, Florida, was sentenced to six years in prison on charges stemming from a multi-million dollar mortgage fraud investment scheme involving 45 properties and $16 million in mortgage loans used for the purchase of residential real estate in the District of Columbia and Maryland.

Dacy was found guilty on March 25, 2015, following a trial in the U.S. District Court for the District of Columbia, of 10 counts of conspiracy, bank fraud, and mail fraud.  His conviction completes a three-year investigation relating to this mortgage fraud scheme. A total of nine individuals have admitted their guilt through guilty pleas or were found guilty after trial. Upon completion of his prison term, Dacy will be placed on three years of supervised release. In addition, Judge Walton ordered that he pay $2,730,345 in restitution and an identical amount as a forfeiture money judgment. Continue Reading…