The lone remaining defendant in the first major federal prosecution of businessmen engaged in property flipping in Baltimore goes on trial Tuesday.
G. Samson Ugorji, a real estate appraiser, is charged in a 14-count indictment with mail and wire fraud for his allegedly false valuations of houses that were bought and quickly resold at substantially higher prices by co-defendant Robert L. Beeman.
A jury of nine women and three men was chosen Wednesday to decide Ugorji's fate in a trial expected to last three to four weeks.
Public records show that Beeman bought and quickly resold more than 100 Baltimore houses in the last four years. Ugorji appraised about 40 of them.
Beeman and three other men were indicted in March along with Ugorji. With the exception of Ugorji, each has pleaded guilty to one count and faces up to five years in prison, a fine of $250,000 and possible government demand for restitution. A fifth man who was not indicted because of his cooperation with investigators also has pleaded guilty to a single count.
Beeman, of Wilmington, Del., pleaded guilty Sept. 1, admitting that he was responsible for causing mortgage lenders to lose as much as $1.5 million on his house sales.
Prosecutors allege that Beeman would buy a house for $10,000 to $20,000, find a low-income, first-time homebuyer with poor credit and offer the house for $500 down. They allege that he would spend $7,000 to $12,000 on cosmetic repairs and then sell the house at a price that exceeded its value.
Ugorji's role, they say, was to provide inflated appraisals that persuaded lenders to finance the deals. Ugorji has pleaded not guilty. "He is going to be contesting the charges," said Barry Pollack, the federal public defender who is representing Ugorji.
The appraiser also faces the loss of his state license. The Maryland Real Estate Appraisers' Commission, acting on a case that a staff member initiated more than two years ago, voted in July to revoke Ugorji's license.
Ugorji appealed that decision, delaying the revocation, and was to plead his case this month. Commission officials said he asked for a postponement and is to argue his appeal at the commission's next meeting in mid-November.