Federal prosecutors yesterday described a Baltimore appraiser as the key to dozens of property flips while his lawyers told a jury that he was one of the victims of the fraud scheme.
The statements came at the opening of the federal trial of G. Samson Ugorji on 14 counts of mail and wire fraud.
Ugorji, 43, is the only remaining defendant in the case, the first major prosecution arising out of a wave of property flips that has swept across Baltimore in the last four years.
He was indicted with four others in March. They are Robert L. Beeman of Wilmington, Del., who bought and quickly resold more than 100 Baltimore houses in the last few years; two principals of Macallan Funding Inc., a defunct mortgage brokerage firm that handled many Beeman deals; and a settlement attorney.
Ugorji's co-defendants have pleaded guilty to one count and are awaiting sentencing.
Prosecutors say that Beeman would buy a house for $10,000 to $20,000, find a low-income first-time homebuyer, usually with poor credit, and offer the house for $500. They allege that he would spend $7,000 to $12,000 on cosmetic repairs and then sell the house for a price that exceeded its value.
Joseph L. Evans, assistant U.S. attorney, said in his opening statement that Ugorji did about 40 appraisals on Beeman deals. "Every one of those appraisals was in support of an inflated contract," he added. "The one completely, absolutely necessary ingredient, the thing that supplies the wind for the hurricane ... is the false, inflated appraisal," Evans said
Paula Xinis, one of two federal public defenders representing Ugorji, countered that her client was a victim of the fraud. "Bob Beeman and the folks at Macallan Funding cooked up a scheme" that fooled a lot of people, she said.
"Mr. Ugorji was fooled by the same scam that fooled so many others," she said.