Fraud draws prison term

The Baltimore Sun

Alan B. Fabian - a wealthy entrepreneur, religious philanthropist and well-connected political fundraiser - was sentenced yesterday to nine years in federal prison for running multiple schemes that defrauded companies, creditors and a fellow church member who attended Bible study in his home of an estimated $40 million.

Advisory guidelines called for a 10- to 12-year sentence. But U.S. District Judge Catherine C. Blake gave Fabian, who lives in Cockeysville, credit for some of the good deeds he has done over the years, such as donating time and money - even if it might not have been his to give, she said. "He could have been a complete con man," Blake said, chalking up Fabian's "consistent, repeated, sophisticated pattern of fraud" to "moral blindness." The good in his life "was significantly outweighed by the many years - at least six - of grossly illegal and deceptive conduct," she said.

He is due to report to prison after Christmas. The restitution Fabian will have to pay and the forfeiture of his assets have yet to be determined. Bankruptcy cases involving Fabian's companies are also pending.

Fabian addressed the court shortly before the judge ruled, breaking down when he mentioned his wife and children. Behind him, dozens of his friends, family and former employees filled the small courtroom, lining the walls and sitting on the floor. His wife, parents and 15-year-old daughter sat in the front row, clinging to one another.

"I stand before you stripped and bare," the 44-year-old father of three said. "From the depths of my soul, I'm so sorry for the pain, the anguish, the loss and the damage that I've caused."

He quoted Aristotle and the Bible, imploring the judge to recognize him as the charitable person he sees himself to be. He told prosecutors that he has prayed for them and their families, and he outlined plans to help others through technology developments and a new Baltimore company he has created, called 4th Sector Ventures LLC.

"To this day, I cannot stop thinking of ways to help people, I can't turn it off," he said. "This is what I am; this is what I do."

Though Fabian was indicted on 26 counts, he pleaded guilty in May to two: mail and tax fraud. He signed a statement of facts that laid out his schemes, which the government said were furthered by his outward appearance of being an ethical businessman, Christian and political player. He served as finance committee chairman for Michael S. Steele's 2006 U.S. Senate bid and as one of 67 finance chairmen for Mitt Romney's presidential bid.

It was an image of success completely "untethered to any reality," prosecutor Jonathan Biran said. "He's likable and ingratiating, of course he is. Successful fraudsters almost always are."

Fabian supporters submitted about 100 letters on his behalf, calling him a good father, husband and friend.

"I personally consider Alan to be a visionary," his wife of 20 years told the court, adding that Fabian is an attentive dad and leads their family in prayer each morning.

A letter from his daughter, read aloud by Fabian's attorney Thursday, said she has always been close to her dad, whom she admires for his sense of humor and his courage.

"People just aren't that simple, people aren't black and white," Fabian's lawyer, federal public defender James Wyda, told the court.

Fabian lived in a $1.5 million Hunt Valley home, owned multiple properties and paid himself more than $800,000 in annual salary, but he was deemed indigent for purposes of representation.

From March 2001 through June 2004, according to the government, Fabian launched a Ponzi scheme, forging invoices and wire-transfer receipts to trick a Georgia computer-leasing company, Solarcom Inc., and various funding sources into believing that he had purchased millions of dollars in computer equipment and claiming they owed him for the materials. He generated more than $32 million this way.

A shell company he created to perpetrate the fraud was forced into bankruptcy in 2004, and he lied repeatedly in court to cover the crime. He also filed several false tax returns, claiming $475,000 in "purely fictional" withholdings, Biran said.

Fabian used some of the stolen money he received to launch the Centre for Management and Technology, a Baltimore nonprofit. The organization was created to offer technology consulting to charities. But U.S. Attorney Tonya Kelly Kowitz said CMAT was "nothing but the next vehicle for Mr. Fabian to get millions and millions of more dollars."

The nonprofit opened lines of credit with banks including Wachovia and Provident but defaulted, causing losses of more than $7 million.

Among the most disturbing of Fabian's actions, according to the government, was that he continued to launch new schemes even as he knew an indictment was pending. In June 2007, he took a family vacation to Egypt and Israel, flying via private jet with a security detail. The money for the $109,000 trip was fronted by Delaware personal assistant services company Hardin & Associates and never paid back.

"This invoice took my company from being profitable in our first year of business to over a $100,000 loss, and that's a tough pill to swallow when I funded the company myself," owner Vaughn Hardin told the court.

After being notified that he was about to be indicted, Fabian also accepted a $500,000 loan from a member of his church, Jim Little, telling him it would keep CMAT, which is in bankruptcy, afloat while he waited for municipal bond money to come through. He never paid that back, either.

"I think my guard was down because of the circumstances of our friendship," Little told the court.

As a young man, Fabian worked in accounting for Arthur Anderson, later starting his own successful company and selling it to a public business for $1.8 million. He took a vice president's position with the buyer, Virginia's Maximus Inc., but then things unraveled. He created shell companies and bilked businesses out of millions.

"The guy was brilliant. He is brilliant; he didn't need to cheat," said Tommy R. Albrecht, one of Fabian's fraternity brothers at Shippensburg University in Pennsylvania, said in a telephone interview. He remembers predicting back in college that Fabian would one day be a millionaire.

"I hope he learned his lesson," he said. "I really do."


2001-2004: Alan Fabian enters into agreements for computer equipment he never purchases. He grosses $32 million.

2003: Fabian uses stolen money to launch the Centre for Management and Technology.

August 2004: His shell company is forced into bankruptcy.

April 2005: Fabian defaults on lines of credit on behalf of CMAT.

Fall 2005: He learns he is under investigation.

Spring 2007: He is told he will be indicted.

June 2007: Fabian takes a $109,000 vacation with his family, sticking the travel company with the bill.

July 2007: Fabian borrows $500,000 and never repays it.

Aug. 8: He is indicted.

May 16: He pleads guilty.

Oct. 24: Fabian is sentenced to nine years in federal prison.

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