Brian H. Davis, a former Baltimore trucking executive who was a major contributor to Maryland political campaigns, was indicted yesterday on fraud and tax evasion charges involving more than $1.7 million in allegedly improper loans.
A federal grand jury charged Davis, the 40-year-old former president of Baltimore-based Oceanic Ltd. Inc., with 17 counts of bank fraud, wire fraud, tax evasion and making a false statement to the Internal Revenue Service.
The indictment accuses Davis, a Hunt Valley resident, of defrauding federally insured banks and other lenders by taking out multiple loans on the same collateral. The charges were filed in U.S. District Court in Baltimore.
Davis is charged with diverting loans for the purpose of purchasing trucks to Oceanic's business and for personal use. The indictment also alleges that Davis failed to report taxable income of $1.6 million from 1991 to 1995.
While the indictment makes no mention of Davis' political activities, Davis said in a recent interview with The Sun that he used some of the money from the Oceanic loans to finance his campaign contributions.
A Sun investigation found that Davis contributed at least $252,227 to candidates in Maryland and elsewhere between 1991 and 1995. Most of the contributions were made under the names of his companies, his employees and his relatives -- some of whom say they did not give Davis permission. Davis has acknowledged responsibility for virtually all of the contributions.
Federal authorities have not said whether the government would investigate the former trucking executive's campaign gifts.
According to yesterday's indictment, Davis arranged for employees of Oceanic to obtain duplicate truck titles from nearby states, then put up the fraudulent titles as security for loans without disclosing previous liens on the trucks.
The indictment states that as part of the alleged scheme, Davis provided lenders with phony tax returns and falsified invoices on the letterhead of a Baltimore truck distributor, Beal GMC Truck Inc. It also charges that Davis forged signatures of Beal GMC officers on checks made out jointly to that company and Oceanic.
"I cannot comment at this time but will be more than willing to discuss it in the future after speaking to attorneys for the government and my own attorney," Davis said yesterday.
Dale P. Kelberman, the assistant U.S. attorney prosecuting the case, declined to say whether others would be indicted in connection with activities at Oceanic. "Our investigation is continuing," he said.
The indictment comes just over a year after three Baltimore-area banks successfully petitioned in U.S. Bankruptcy Court to seize control of Oceanic, alleging that the company had defrauded them of millions of dollars.
Howard Rubenstein, who took over the company as bankruptcy trustee a year ago, reported early this year that he was able to find less than $2 million in assets to satisfy $13.3 million in debts. He called the case the most murky bankruptcy he has handled in 40 years in the business.
Among the 10 banks named in the indictment as victims of Oceanic-related fraud are the Bank of Baltimore, First National Bank, Elkridge Bank, NationsBank, Commercial & Farmer's Bank, Loyola Federal Savings Bank, First Mariner Bank and the Bank of Glen Burnie. The 10 private lenders included AT&T; Capital Corp., G. E. Capital and Orix Credit Alliance Inc.
Kelberman said Davis had not been arrested and that no date had been set for arraignment.
Davis faces eight counts of bank fraud and three counts of wire fraud, each carrying a maximum penalty of five years' imprisonment and a $250,000 fine.
If convicted on the single count of making a false statement to the IRS, Davis could receive a three-year term and a $100,000 fine. The five tax evasion counts each carry a possible penalty of five years in prison and a $100,000 fine.
Maryland political figures who received campaign contributions from Davis include Gov. Parris N. Glendening, who got at least $25,000, and former Rep. Helen Delich Bentley, who received more than $58,000.
Others who received more than $10,000 include Baltimore County Executive C. A. Dutch Ruppersberger; retiring state Sen. John A. Pica Jr.; and Richard D. Bennett, the 1994 Republican nominee for Maryland attorney general.
Pub Date: 12/19/96