A Bowie man whose fraud scheme sent more than a dozen homes into foreclosure and caused owners to lose more than $1.2 million in home equity was sentenced Thursday to more than three years in prison, prosecutors said.
Charles Donaldson, 58, recruited homeowners struggling with their mortgages for what he said would be a foreclosure rescue plan: They would sell their homes to investors, remain there as renters for 12 to 18 months and then buy the properties back after repairing their finances, according to a statement Thursday from Maryland's U.S. Attorney's Office.
Severna Park, brokered loans on behalf of Donaldson's family and friends — who fronted money as investors in the fake rescue plan — to buy the houses by submitting mortgage applications with inflated income and other false information, the statement said.
More than $4.7 million in fraudulent mortgage loans were issued because of the scheme, though the final amount of loss is not certain because many of the homes remain in foreclosure.
Donaldson promised the defrauded homeowners that he would hold most of their home equity in an escrow account to help with the payments. Instead, Donaldson spent much of the homeowners' equity, including spending $170,000 on a home for himself.
The homeowners and Donaldson's family and friends had to use their personal savings and credit cards to make mortgage and rent payments. Fourteen homeowners let their properties go into foreclosure as a result and two others are in foreclosure proceedings.
At least 20 victims were defrauded by Dean and Donaldson's scheme.
Dean's sentencing is scheduled for March 22. She faces a maximum prison term of 20 years.
Baltimore Sun reporter Jamie Smith Hopkins contributed to this article.