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Glen Arm home builder sentenced to 15 years for $19.8 million fraud

A Glen Arm home builder was sentenced Tuesday to 15 years in federal prison for nearly $20 million in investment fraud and tax evasion, prosecutors said.

Patrick J. Belzner, 45, told investors that he needed an escrow account with large sums of money to obtain loans for commercial real estate projects to establish that it had "liquidity," Maryland's U.S. Attorney's Office said. For two years, upon receiving investments that he assured lenders could not be touched without their authorization, Belzner and a colleague withdrew millions to pay off personal and business debts, prosecutors said. In order to cover up the withdrawals, his company paid back earlier investors with later investors' money, prosecutors said.

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A federal court determined Belzner, who also went by the name Patrick McCloskey, owed their 26 victim investors more than $19.8 million and ordered that it be paid back.

Belzner — who pleaded guilty in 1999 to an embezzlement conspiracy to defraud a Columbia food distributor of more than $250,000 — also avoided paying millions in taxes by not reporting his assets for years and having his company pay for his living expenses instead of paying him a salary, prosecutors said. He owes more than $2.6 million in taxes, interest and penalties, prosecutors said.

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Brian McCloskey, 44, of Baltimore; Kevin Sniffen, 53, of Phoenix; Mervyn A. Phelan, Sr., 74, of Newport Beach, Calif.; and Gregory E. Grantham, 57, of Oceanside, Calif., have also pleaded guilty to roles in the conspiracy, prosecutors said. Sean Krondak, of Irvine, Calif., has pleaded guilty to obstruction of justice in the scheme, prosecutors said. They are to be sentenced in November and December, prosecutors said.

Belzner's 15 year prison sentence is to be followed by three years of supervised release. He is charged with wire fraud conspiracy, wire fraud and tax evasion. He could not be reached for comment.

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