A Pylesville man will spend 19 months in federal prison and be responsible for paying a significant portion of almost $1.2 million in restitution for conspiring to commit mail, wire and bank fraud arising from mortgage fraud schemes involving Baltimore City properties, according to the Maryland U.S. Attorney's Office.

Kevin Campbell, 53, was sentenced Friday in U.S. District Court in Baltimore, where Judge James K. Bredar ordered him to pay $1,182,822 in restitution and also imposed five years of supervised release once Campbell gets out of prison, the U.S. Attorney's Office said in a news release.


In a related case, Bredar on Thursday sentenced a co-conspirator, Jonathan L. Miles, 45, of Perry Hall, to 18 months in prison followed by five years of supervised release for conspiring to commit bank fraud. Miles was also ordered to pay restitution of $1,182,822, the U.S. Attorney's Office said.

According to the judge's order of restitution and related case documents, Campbell was to pay $525,000 by Oct. 15 and then $1,000 a month for the five years of his supervised release. Miles is also liable for repaying the total, according to court documents.

The judge also ordered that Campbell, who has an address on Wheeler School Road, should serve his prison time in a minimum security facility in Morgantown, W.Va., reporting no later than Nov. 12.

According to prosecutors, 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 in Reisterstown.

According to their plea agreements, from 2005 to 2007, Campbell and other defendants caused false information to be provided to mortgage lenders to enable prospective purchasers to qualify for 18 home mortgage loans on properties in Baltimore that they could not actually afford.

Unknown to the lenders, Campbell provided most of the down payments and all of the closing costs, the plea agreements state. As a result, the loan application and HUD-1 documents substantially overstated the amount of the down payment and closing costs that the purchasers brought to the closings, thereby making the purchasers appear to be more creditworthy and to have more of a personal investment in the property than was actually the case.

In addition, the agreed purchase price established for the properties substantially exceeded the market value, according to prosecutors. Miles caused the inflated purchase prices to be supported by a misleading appraisal report, the plea agreements state.

By inflating the purchase price, Campbell and Miles were able to obtain financing that was substantially in excess of the original purchase price for each property, the plea agreements state, enabling Campbell to cover most of the purchase price and all of the closing costs with the proceeds he received from the transaction, while still earning a significant profit.

Campbell also received additional hidden payments amounting to 10 percent of the sales price disguised in the HUD-1 as a real estate commission to City Realty, according to the plea agreements, while Miles received a significant commission as the loan broker on each transaction.

Sixteen of the 18 loans ultimately went into default, prosecutors said, resulting in foreclosures and losses totaling approximately $1.2 million to mortgage lenders, as well as Fannie Mae, Freddie Mac and four individual purchasers who lost money they provided for down payments on the mortgages.

According to the judge's restitution order, three individual purchasers will be paid what they are owed first, with the judge noting their losses "had the greatest impact upon them and their economic circumstances." Lenders are to be repaid next, according to the order, and will be obligated to reimburse insurers for any prior payments connected to losses on the properties involved.

According to court records, a third person, a lawful permanent resident of the U.S. but not a citizen, was indicted in February in connection with the same conspiracy.