Police arrested the owner of a southern Anne Arundel County auction business that sells cars police seize in drug arrests and charged him yesterday with 56 counts of theft in the theft of $18,800 from Charles County government.

Investigators also took files and computers from the offices of Melvin Edward Richards' Colonial Auction Services Inc. as part of an investigation into whether he stole from Anne Arundel County as well, authorities said.

From 1990 to 1996, Richards was under contract with Charles County to auction seized and surplus county vehicles and to return almost all of the money to the county, keeping 2 1/4 percent as profit, said Detective Sgt. Ed Godwin of the Charles County Sheriff's Office.

But in selling 55 cars and trucks over those years, Richards filed false paperwork claiming that he sold the vehicles to auto dealers for thousands less than he did, Godwin said. He pocketed the difference between the false and real sale prices, Godwin said.

"Taxpayers in Charles County and perhaps elsewhere are being ripped off by this guy, who looks like he's giving them a good deal when he's really not. We are alleging that he is a thief, a white-collar criminal," said Anne Arundel County State's Attorney Frank R. Weathersbee, whose department helped in the investigation.

The Charles County Sheriff's Office began to suspect the auctions in June 1996, when Richards claimed he had sold an Acura Legend with a book value of $6,700 seized in a drug case for $800, said Godwin.

An investigation found that Richards had sold the car for $2,100 more than he reported, according to Charles County Sheriffs Department officials.

State and local police arrested Richards at his offices yesterday morning, and he was led, wearing handcuffs and holding papers to hide his face into Anne Arundel County District Court Commissioner Janice Barnett's office.

Barnett explained that he could be sentenced to 15 years in prison for each of his 24 felony theft charges and 18 months for his 32 misdemeanor charges. She released him on his written promise not to skip his next court date, which has not been set.

The 58-year-old former auto parts salesman from Brandywine earns more than $100,000 a year from the auction business he started in 1984, according to his statements to the commissioner. He has offices in Wayson's Corner and Upper Marlboro.

In addition to his contracts with Charles and Anne Arundel counties, Richards holds auctions for other local governments and charities, according to law enforcement officials.

"He is one of Southern Maryland's leading auctioneers and has been a respected member of the business community for years," his attorney, Timothy Maloney, said outside of court. "There is absolutely no merit to these allegations whatsoever. The records will indicate that he conducted each and every transaction properly."

Richards declined to comment.

The investigation of Richards' auctions of Anne Arundel County vehicles is the most recent development in a more than a year-old disagreement between Weathersbee and County Executive John G. Gary over whether the county's drug asset forfeiture program is mismanaged.

Weathersbee yesterday said he had warned the Gary administration last April that the county should stop doing business with Richards' company.

Jerome W. Klasmeier, the county central services officer who extended Richards' two-year contract by a year in March, yesterday said that he was aware of the investigation but thought it would be unfair to terminate the deal without a conviction.

"I certainly want to review the circumstances being alleged here, but you are innocent until proven guilty," Klasmeier said. "We don't want to have a circumstance where we are sued for breach of contract."

Richards won his contract with the county on April 1, 1996, when he beat out four other auctioneers bidding to sell the county's surplus vehicles by offering a 1 percent margin for his services, Klasmeier said.

Richards' company auctions off about 300 over-the-hill county police cars and public works vehicles a year, plus about 50 cars seized by police in drug cases. He reported to the county that he brought in $354,897 by selling these vehicles to car dealerships in 1997, returning 99 percent of this money to the county, Klasmeier said.

Gary's political foes tried to use yesterday's arrest as evidence his administration has ignored signs of corruption among county workers and contractors.

On Sept. 1, the Anne Arundel County state's attorney's office filed theft charges against a county jail clerk after an investigation found $60,000 missing. In February 1997, two county public works employees were convicted of theft for pocketing fees at the county landfill. And in October 1997, a county public works official was charged with stealing $158,000 worth of goods from the county.

David Sheehan, campaign manager for Democratic County Executive Candidate Janet Owens, said that the Gary administration's failure to heed an April 14 written warning from the state's attorney's office about potential problems at Colonial Auction is part of a pattern of lax management.

"Why would you keep on doing business with someone whom the state's attorney's office says is a bad guy?" Sheehan asked. "What it does is show the absence of management and controls. This cannot be tolerated."

George Shenk, Gary's campaign manager, said the prosecutions of county workers and contractors is evidence Gary is eager to ferret out corruption. And, Shenk said, the county could not terminate Colonial Auctions' contract on the basis of vague warnings from the state's attorney's office.

"Yes, indeed, there does seem to be a pattern. The pattern is that the Gary administration will not tolerate any employee or any contractor engaging in illegal activities. We will find them, and will arrest them. This is how the system should work," she said.

Richards also was charged in 1992 with making false entries on state forms that authorized the transfer of car titles, Assistant State's Attorney William D. Roessler reported in a Sun article published in September 1997. Richards received probation before judgment, which cleared his record after a year, according to Maloney, Richards' lawyer.

The investigation launched into Richard's auctions of Anne Arundel County vehicles is not the first into the county's troubled drug-asset forfeiture program.

County Auditor Teresa Sutherland in December 1997 criticized state's attorney's office employees who help run the program for sloppy handling of cash.

In August 1997, the Gary administration asked State Prosecutor Stephen Montanarelli to investigate whether any assistant state's attorneys had committed fraud by lying to the courts about their handling of the cars.

But in February 1998, Montanarelli said he found no grounds for criminal charges against prosecutors.

Pub Date: 10/14/98