Federal prosecutors have filed
a criminal information charging Kenneth Koehler with conspiracy to commit wire fraud as part of an alleged mortgage fraud scheme in southeast Baltimore. An information is a statement of charges filed in lieu of an indictment.
Koehler, a real-estate investor whose tight group of buyers and sellers
profiled in 2008 ("Shell Game,"
, Oct. 1, 2008), claimed a defunct outsourcing company as his and others' employer in order to persuade lenders to loan money, the information, filed in Maryland District Court on Aug. 9, alleges.
story showed that Koehler's buyers paid eye-popping prices for shabby homes after the real-estate bubble burst, then defaulted on their mortgages. They borrowed most of the money from Taylor, Bean, and Whitaker of Florida and First Magnus of Arizona, two finance companies that later collapsed because of bad loans. The loans in Koehler's scheme were arranged by Worthington Mortgage, a "boutique" mortgage brokerage controlled by Joshua Goldberg, who lived a few doors down from Koehler on Gough Street.
Goldberg and his life partner, Bayardo Alvarez, also defaulted on several home loans. Goldberg filed for bankruptcy in 2010 and applied for a taxpayer-backed modification of the mortgage on his Guilford Avenue home ("Shelling Out,"
, July 7, 2010). Foreclosure proceedings were begun on that house last month-more than a year after the couple emigrated to Israel.
Goldberg and Alvarez's move made headlines last summer, when Israel's interior ministry at first declined to allow Alvarez, who is not a Jew, to become a citizen under that nation's Law of Return, which pledges citizenship to any Jew and his or her spouse. (Alvarez and Goldberg reportedly were married in Canada in 2007). The ministry relented in Aug. 2011, according to a report inIsraeli newspaper
, which said that it was the first time the Law of Return had been applied in a same-sex marriage.
Charged separately as part of Koehler's scheme is David C. Christian, the appraiser who made the alleged frauds possible. In a plea agreement signed June 29, Christian admits to substituting pictures of renovated houses in place of the actual, dilapidated houses he was appraising and using "inappropriate comparable properties" to claim higher values for the houses. "Often co-conspirator A would find inappropriate comparables from public records databases and tell Christian to use them," the plea agreement says.
Co-conspirator A "had recently taken control of Worthington, a mortgage brokerage company operating . . . out of an office on Gough Street in Baltimore," the plea agreement says. That can only be Goldberg. He is alleged to have falsified income statements for clients-including Christian's wife-in order to help them steal money from banks.
In the plea, Christian, 62, agreed that he worked with Goldberg to falsify two refinance applications for his own Catonsville house, which eventually cost Freddie Mac, the government sponsored enterprise that backed the loan, more than $139,000.
In 2008, U.S. taxpayers bailed out Freddie Mac and its sister company, Fannie Mae, with about $200 billion.
Prosecutor Gregory Bockin includes a chart in the plea agreement listing 16 additional properties on which lenders lost a minimum of $2.5 million because of Christian's fraudulent appraisals. At least 11 of those addresses were involved in Koehler's ring, which included Koehler's domestic partner, Ken Wallace, an unlicensed contractor, an interior decorator named Janet Praid, and restaurateurs George and Emmanuel Agelakis, brothers who reportedly returned to their native Canada. George Agelakis has open warrants in Baltimore District Court for arson threats and identity theft.
The Agelakis brothers are readily identifiable in the Koehler information as "co-conspirator E and . . . co-conspirator E's brother" but, like Goldberg, Alvarez, Praid, and Wallace, are not named or charged in available federal court documents. If he returns to the United States, Goldberg faces an open warrant in Baltimore County District Court for passing a bad check, according to online court records.