A prominent Prince George's County land developer was convicted of bank fraud yesterday for a scheme in which he and a partner shielded assets from banks seeking to collect on defaulted loans.
Daniel I. Colton, 48, of the former real estate company Colton and Laskin Inc. was convicted in U.S. District Court in Baltimore on three counts of bank fraud and one count of conspiracy to commit bank fraud. The jury deliberated for about 10 hours.
A co-defendant, Montgomery County attorney Ellis J. Koch, 56, was acquitted. Colton's former partner, Dennis Laskin, pleaded guilty in October 1996 to bank fraud and testified against Colton and Koch.
During the three-week trial, federal prosecutors described a scheme in which Colton and Laskin tricked two Maryland banks, TrustBank and Second National Bank, into believing that their net worth was less than it actually was. Both banks negotiated for lower sums on defaulted land loans because they were not told about a $10 million trust fund that Laskin controlled.
Had the banks been told about the trust fund, they would have required the men to pay back more than they did to settle the loans, prosecutors said. The men had originally taken out the loans for $3.1 million and $20 million but negotiated to buy them back for less.
The $3.1 million loan from TrustBank was repurchased by the men for $1.5 million in 1991, according to court papers.
William C. Brennan Jr., an attorney who represented Colton, said he plans to appeal. Colton acted on the advice of his lawyer at the time and should not have been convicted, Brennan said.
The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. Colton will be sentenced Jan. 6.
Pub Date: 10/29/98