www.baltimoresun.com/business/real-estate/bs-bz-mortgage-fraud-sentence-20121204,0,1530327.story

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Long sentence highlights efforts to prosecute mortgage fraud

Owings Mills man given 35-year sentence by Baltimore County judge

By Steve Kilar, The Baltimore Sun

10:13 PM EST, December 4, 2012

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Con artist Rodney Getlan did not just take people's money — his actions caused them to lose their homes.

That he stole the sanctuary of a roof and four walls may have led to Getlan's getting a much longer prison term. Baltimore County Circuit Judge Vicki Ballou-Watts sentenced Getlan to 35 years in prison this week, a sentence on par with punishment for some violent crimes.

"Rodney got what he deserved," said Lauri Hartz, who attended the court proceeding as one of nearly 50 known victims of Getlan's scheme to divert mortgage payments to his own accounts.

Prosecutors say the jail time accurately reflects the severity of Getlan's crime — and shows the ferocity with which mortgage scammers are being pursued. In the wake of the housing market collapse and fraud that helped spur the foreclosure crisis, state and federal prosecutors have taken on a growing caseload, with success.

In another case earlier this year, a man was sentenced to 150 years in prison for his participation in a Ponzi scheme that promised — and failed — to pay off investors' mortgages.

Getlan's "complete disregard for the law as well as the victims" helped to justify a long sentence, said Erin McCarthy Naylor, director of mortgage fraud for the Commissioner of Financial Regulation, a division of the state Department of Labor, Licensing and Regulation.

"Your home is your security," said Hartz, 56.

Naylor helped prosecute the case, the first criminal mortgage fraud case that the state agency has been involved in since her position was created last year, in part to offer expertise to local state's attorneys' offices. Before then, investigators would refer potential criminal charges to local or federal prosecutors, and their involvement would end there.

Now the agency is partnering with prosecutors in Carroll and Prince George's county on mortgage fraud cases in which suspects have been indicted. It also has active investigations in Baltimore and Baltimore, Prince George's and Howard counties, she said.

That effort is just one of several examples of how Maryland prosecutors at the state and federal level are putting an emphasis on cracking down on mortgage fraud.

The Maryland attorney general's office routinely investigates mortgage fraud and has discussed expanding those investigations using funds from a national legal settlement related to unfair mortgage servicing practices, including "robo-signing."

And the U.S. attorney's office for Maryland started coordinating a mortgage fraud task force three years ago that has funneled several mortgage fraud cases to courts.

Among the recent federal sentences in Maryland for mortgage fraud:

•In November, an Ellicott City title agent was sentenced to two years in prison for stealing nearly $700,000 from mortgage escrow accounts.

•In June, the assistant manager of a Gambrills mortgage company was sentenced to four years in prison for a mortgage fraud scheme adding up to $4.9 million.

•In May and March, respectively, a mortgage broker and a loan officer were each sentenced to more than three years in prison for creating a fraudulent mortgage rescue scheme that resulted in more than $1.2 million in losses.

•In March, Andrew Hamilton Williams Jr. was sentenced to 150 years in prison for his participation in a $78 million Ponzi scheme in which Williams and his co-conspirators, part of a business called Metro Dream Homes, didn't pay off investors' mortgages as promised.

In the Getlan case, Hartz and her mother, Sally Begun-Gordon, 83, lost about $30,000 to the fraud. But their financial and emotional distress has been much greater, Hartz said. Now both of their homes are in the foreclosure process. Hartz is going through mediation with her lender; her mother has not reached that point yet.

The two Rockville residents were referred to Getlan by their mortgage broker, so they had reason to think he was legitimate, Hartz said.

Prosecutors have alleged that Getlan caused direct losses of about $400,000, though the amount of restitution owed is still being litigated. Getlan pleaded guilty to crimes related to nine homeowners on the condition that the state's attorney would not pursue the remaining claims.

Prosecutors said that the scheme began in 2009, in the middle of the housing crisis, and survived a cease-and-desist order and even his first guilty plea. In addition to charging an advance for a loan modification — generally illegal in Maryland — Getlan also forged documents to make it appear that lenders had approved the modifications, according to the charging document.

Getlan, 45, of Owings Mills, then used several bank accounts and fake company names to make homeowners think they were sending their monthly payments to their mortgage servicers — even though the money was actually being sent to mail forwarding services across the country that he set up, prosecutors said.

He also changed the mailing addresses on his victim's accounts so that their mortgage servicers would not notify them that something was amiss.

Throughout the scheme, Getlan was on notice that his actions were illegal, prosecutors say, and he continued to flout the law. A company he was affiliated with, U.S. Equity Solutions LLC, received a cease-and-desist order in mid-2009.

Then, in February 2011, Getlan was charged in Baltimore County with theft related to a mortgage modification he'd pretended to procure for a man in South Carolina. He pleaded guilty to the single count of theft but continued to receive monthly mortgage checks form dozens of other victims, prosecutors said.

"He was collecting money from this group after he was sentenced," Naylor said.

While Ballou-Watts suspended 10 years of Getlan's sentence, and Maryland's parole guidelines mean he will likely be behind bars for less than a decade, the sentence is a long one for mortgage fraud when compared to federal sentences in similar cases.

Leonard Howie, Maryland's secretary of labor, licensing and regulation, called Getlan's sentence "a victory for Maryland consumers."

But Getlan's attorney, Howard Cardin, has argued that the punishment is outsized compared with similar cases in federal court and plans to seek a reduced sentence.

"This sentence is well out of line with the federal sentencing guidelines," said Cardin.

Marc Mauer, executive director of the Sentencing Project, a Washington-based think tank that analyzes sentencing policy, said longer sentences in such cases don't necessarily have the desired deterrent effect.

"What does society gain from 35 years versus five years?" he asked. "I think the answer is that there is not much additional deterrent value."

Adam Lippe, chief of the economic crimes division of the Baltimore County state's attorney's office, noted that state sentencing guidelines often allow for earlier paroles than the federal system. Moreover, he said, the premeditated and drawn-out nature of Getlan's fraud, his disregard for his first conviction and the fact that his crimes undermined homeownership make a longer sentence seem appropriate.

"It wasn't just that he took their money," Lippe said. "It was that he took their money and then some of them got evicted."

steve.kilar@baltsun.com

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