Four men who bought and quickly resold scores of Baltimore houses in recent years were charged yesterday in federal court with defrauding mortgage lenders of between $1.5 million and $2.5 million.
Federal prosecutors said in court papers that they expect the four defendants to plead guilty to the mail fraud charges.
Charged in an alleged property flipping scheme were Darnell Acree, 49, of Owings Mills; Bryan P. Rosenberg, 39, of Lutherville; Glenn Rosofsky, 36, of Baltimore; and Henry Kimball, 38, a former Marylander living in California
The two-count criminal information filed in U.S. District Court alleged that, "operating individually and through a number of corporations," the defendants carried on a fraud scheme over a three-year period ending in October last year. They purchased low-cost houses from city landlords and resold them at prices generally two to four times what they had paid for them, the documents said.
To attract buyers, they advertised in newspapers in Washington and elsewhere, the court papers alleged. They also used false and fraudulent documents, including false appraisals, to induce lenders to finance the purchases. They promised buyers that the deal would be fully financed and that they would get cash back at settlement, according to court records.
Many buyers purchased more than one house. Carla Zimmerman, who lives in the Washington area and responded to an ad in the Washington Post, purchased 15 between Christmas Eve 1998 and May 11, 1999, including five sold by Housemax Inc., one of the corporations named by prosecutors.
"It was extremely painful," Zimmerman said. She added that many of the houses were in poor condition and that she was unable to keep them up. Some lenders canceled the debts, and she eventually lost all the houses to foreclosure.
The charges filed yesterday said the defendants, using various fraudulent means, obtained mortgages for their buyers that exceeded the value of the houses by $1.5 million to $2.5 million.
Acree and his lawyer could not be reached for comment. Lawyers for Rosenberg and Rosofsky declined to comment.
Paul R. Kramer, Kimball's attorney, said his client "is preparing to take his medicine."