A Bel Air man’s guilty plea to federal mail fraud charges was unsealed Thursday, Maryland’s U.S. Attorney’s Office announced. The man pleaded guilty to acting as a straw purchaser for a bank executive buying a house in Rising Sun.
Daniel Whitehurst, 35, pleaded guilty on April 6, 2018, but his plea was unsealed Thursday — seven days after an alleged co-conspirator, Mary Beyer Halsey, 59, of Rising Sun, was indicted, according to a news statement.
Whitehurst was charged with one count of conspiracy to commit bank fraud while Halsey is charged with conspiracy to commit bank fraud, receipt of a bribe by a bank official, false statement in bank records, false statement to a bank examiner and two counts of bank fraud.
Prosecutors allege Halsey, CEO of Cecil Bank in Elkton, conspired to grant Whitehurst, an employee of a real estate development company, a $650,000 line of credit in exchange for him agreeing to be the straw purchaser of a home for Halsey between 2012 and 2013.
“[Halsey] told the defendant that she was personally interested in acquiring the house for herself. However, because she could not buy the house herself under the bank’s conflict of interest policy, she wanted his help to buy it and renovate it,” Whitehursts’ plea agreement states.
On April 20, 2011, Cecil Bank began the foreclosure of a single-family home at 127 Ebenezer Church Road in Rising Sun. That year, the bank valued the full property at $295,000, but Whitehurst proposed to buy it for $145,000 a month after the appraisal, prosecutors said.
Halsey took that offer to the bank’s board — though she told them he was offering $140,000 — and was instructed to make a deal for the best price.
In August of that year, Whitehurst submitted a contract to purchase the property for $150,000, well below its value. Halsey signed off on the document on behalf of Cecil Bank, the release states.
On Nov. 21, 2012, Halsey represented the bank at the home’s settlement, and the property was Whitehurst’s. According to court documents, Halsey did not disclose her personal interest in the property to the bank’s board, court documents allege.
“Halsey and Whitehurst understand the physical condition of the property; and that they used inappropriate residential properties as comparables to justify the sale price of $150,000 for the property, which was less than its fair market value,” the release states.
On March 28, 2012, Halsey sat on a loan committee meeting at Cecil Bank that considered and approved the $650,000 line of credit for Whitehurst, the release states.
The transaction did not go unnoticed, the release states, as a bank examiner for the Federal Reserve Bank of Richmond called Halsey to ask about the sale. She told that investigator she was “not totally familiar with [that] property,” and that the bank had not listed it with a realtor. It had not been listed because of “issues with the county over the bonds outstanding,” the release states.
It did not stop there, prosecutors said; Whitehurst applied for and received a $100,000 loan from another bank, which he said was to purchase 127 Ebenezer Church Road for himself in October, the release states. Whitehurst’s plea agreement states he told the bank that he wished to buy the property as an investment. The indictment against Halsey alleges that she wired $75,000 to Whitehurst for the home’s down payment, closing costs and upgrades to the property that she directed him to make.
Halsey also gave Whitehurst money for improving and maintaining the house, along with paying the monthly mortgage and loan fees on the $100,000 Whitehurst fraudulently obtained, the release states. She allegedly issued three checks totaling $60,000 to him for those purposes and picked out construction materials and color patterns for new kitchen cabinets, counter-tops and flooring, according to Whitehurst’s plea agreement.
Whitehurst’s plea agreement further orders him to pay $145,000 to Cecil Bank, which is the amount of money they lost for selling the home at the false price. He will also forfeit the home on Ebenezer Church Road to the government.
Whitehurst faces a maximum sentence of 30 years in federal prison, the release states. No sentencing date has been scheduled.
Halsey faces a maximum of 180 years on her six charges, if found guilty. Each charge carries a maximum sentence of 30 years, though the release notes that actual sentences are often less than they appear on paper.
“Actual sentences for federal crimes are typically less than the maximum penalties,” it states. “A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.”
Halsey was released under U.S. Pretrial Services’ supervision, the release states. Whitehurst was released 18 days after his 2018 guilty plea was entered in court, according to court documents.