The indictment of eight individuals in two property-flipping cases where lenders allegedly lost millions of dollars on hundreds of fraudulent Baltimore house sales was announced yesterday by Thomas M. DiBiagio, the U.S. attorney for Maryland.
DiBiagio said that the defendants -- four in each case -- bring to 89 the number of people who have been charged in flipping cases in Maryland since federal prosecutors began to investigate the rampant practice five years ago.
Seventy-one of the defendants were charged in U.S. District Court in Baltimore, and 18 were charged in U.S. District Court in Greenbelt. Sixty-seven have been convicted, two have been acquitted, and the others have cases pending.
Property flipping is the purchase of a house at a low price and the quick resale at a higher price. The practice becomes illegal when falsified documents are used to sell the houses at inflated prices to buyers who often would not qualify for a loan if accurate information was submitted to the lender.
Often the buyers, either homeowners making their first house purchase or amateur investors purchasing more than one house, end up defaulting on the loans.
In one of the cases announced yesterday, Walter Pyle Hammond Jr., 47, of Glen Burnie was charged in a 17-count indictment with bank fraud, mail fraud and wire fraud.
The federal grand jury indictment said he purchased low-cost inner-city houses and flipped them to investors, using falsified documents and inflated appraisals. between August 1997 and March 2000.
The investors, who bought multiple properties, were told that a corporation Hammond controlled, Guardian Foundation LLC, "was a charitable corporation interested in revitalizing properties in inner-city Baltimore," the indictment said.
They were told that they didn't have to put up any cash for the purchase, that Guardian would collect rents and pay all expenses, including mortgage payments, and that Guardian would buy the houses in a year. And, the indictment said, the investors were promised that they would receive from $200 to $5,000 for each house they purchased.
Guardian did not repurchase the houses, and the investors defaulted on the mortgages, the indictment said.
Indicted with Hammond were Joyce Thelma Lehew, 71, of Selbyville, Del., a house purchaser who allegedly falsified her income on mortgage applications; David Allen Uhrich, 53, of Vienna, Va., who allegedly was paid by Hammond to recruit investors; and Christopher Francis of Cape Coral, Fla., who allegedly did falsified appraisals on the properties.
In the second case, Steven Scott Jernigan, 40, of Abingdon, a real estate broker; Nicholas J. Pistolas, 62, of Baltimore, a lawyer, and Barbara Ann Prichard, 57, of Bel Air, partners in a title company; and Norman Reginald Anderson Jr., 32, of Abingdon, an investor who allegedly falsified mortgage applications, were charged in a 16-count indictment with mail and wire fraud.
The indictment alleges that Jernigan and Anderson were involved in buying and selling houses to investors, using falsified documents and inflated prices, and that the settlements were conducted at All County Title, the firm owned by Pistolas and Prichard.
"The investors defaulted on hundreds of mortgage loans," the indictment said.
Two other defendants in the case, Andrew Michael Bogdan and Carlos Sagastume, were charged earlier and have pleaded guilty. They are awaiting sentencing.
Pistolas' lawyer, Martin S. Himeles Jr. issued a statement that said his client "looks forward to a trial where a jury will hear all the evidence and render a verdict of not guilty to these unfounded charges."
Attorneys for the other defendants did not respond to telephone messages seeking comment.