Admitting that his illegal activities cost mortgage lenders as much as $500,000, a Baltimore County man pleaded guilty yesterday in federal court for his role in a fraudulent Baltimore property flipping scheme.
Thomas "Tucker" Mayer pleaded guilty to a single count of wire fraud in a 17-count indictment handed up by a grand jury in June.
Mayer, 53, is the eighth person in recent months convicted on federal charges related to property flipping.
Two co-defendants in the case are scheduled for trial in March. They are Angus E. Finney, Mayer's business partner, and Guy Shaneybrook, a real estate appraiser who evaluated many of the houses Mayer and Finney flipped.
Mayer, a Bowleys Quarters resident, has agreed to cooperate with prosecutors and is expected to testify against his co-defendants and also at the June trial of two other defendants.
U.S. District Judge Marvin J. Garbis set sentencing for July 25. Mayer could be sentenced to 24 to 30 months in prison. Prosecutors told Mayer that if he provides them "substantial assistance," they would recommend a reduction of as much as nine months.
Shaneybrook also is scheduled to go on trial Tuesday, along with two other people, in a related flipping case. His co-defendants in that case are Narade Pramuan, an appraiser, and Marcia McNeil, who worked closely with Carl Schulz, a defendant who pleaded guilty to two counts of fraud last week.
Schulz admitted that his activities had cost lenders as much as $1.5 million. He said later that he had flipped about 120 houses. He is cooperating with prosecutors and is expected to testify.
Court documents contend that Finney, a former lawyer who was disbarred in 1997, and Mayer were partners with Schulz and McNeil in a flipping scheme in the mid-1990s. Finney and Mayer parted ways with Schulz and McNeil and in 1997 sued them in Baltimore County Circuit Court, alleging fraud.
Schulz responded with his own lawsuit. The suits were settled or dropped in 1998.
In the past five years, more than 3,500 Baltimore houses have been bought and resold within six months at price increases of at least 100 percent. While flipping isn't unlawful, it becomes illegal if falsified documents and inflated appraisals are used to sell the houses for more than they are worth and to acquire mortgages for more than the houses' value.
Mayer and Finney bought houses in run-down, crime-ridden Baltimore neighborhoods, did some cosmetic repairs and sold them quickly, the statement of facts said.
They targeted buyers who wanted to be landlords and who might buy more than one house, telling them they wouldn't have to put money into the deal and that rent from the properties would more than cover monthly mortgage payments.
After selling the houses for much more than they had just paid for them, Finney and Mayer split the profits with the buyers, Assistant U.S. Attorney Robert R. Harding told Garbis. Nevertheless, some of the buyers ended up in foreclosure and bankruptcy, the statement said.
The count to which Mayer pleaded guilty involved the 1997 sale of a house in the 2000 block of Christian St. in Southwest Baltimore. Heritage Development Group, a company set up by Finney and Mayer, paid $13,276 for the house and sold it the same day for $35,000.