Woman pleads guilty in bank fraud Scheme said to net more than $1 million for ex-day-care operator.

February 19, 1992|By Norris P. West | Norris P. West,Staff Writer

A former day-care operator has pleaded guilty to a bank-fraud scheme that authorities say yielded her more than $1 million and a lifestyle that made her a frequent flier between Baltimore and her $750,000 house in Mexico.

U.S. District Judge Frederic N. Smalkin scheduled an April 1 pre-sentence hearing for Gloria Louise Dorsey, who was arrested Dec. 26 at her mother's home in the 1600 block of Gray Haven Court. She was allowed to remain free on $250,000 secured bond.

Dorsey yesterday also pleaded guilty to illegally taking between $20,000 and $30,000 in U.S. currency out of the country in December 1988 without reporting it, as required.

She faces a maximum penalty of 10 years in prison without parole and a $500,000 fine when she is sentenced May 13.

The presentence hearing will determine exactly how much money she illegally received from Signet Bank, Chase Bank of Maryland, Slavie Federal Savings and Loan Association and Severn Savings and Loan.

Federal investigators say Dorsey persuaded the five banks to lend her a total of $1.08 million by giving them false tax returns that overstated her income for the years 1982 through 1987.

For instance, she submitted 1985 tax records that listed her income at $90,560 in 1985, but her 1040 form filed with the Internal Revenue Service put her income at $531, according to court documents.

Dorsey also is charged in a civil suit in Baltimore County with using false tax returns to mislead the woman who bought her day-care center, known as Discovery Days and located in the 9700 block of Philadelphia Road.

Joan J. Hurt, who bought the day-care center for $556,000 in 1988, claims Dorsey falsified records that stated the day-care center generated $400,000 a year. Actually, it brings in less than $300,000 annually.

Ms. Hurt continues to operate the day-care center, and Dorsey no longer is associated with it.

Dorsey paid back some of her bank loans, according to the plea agreement she signed yesterday. Her attorney told Judge Smalkin the outstanding amount owed to the banks probably would be between $20,000 and $74,000.

Assistant U.S. Attorney Andrew G. W. Norman said the amount she actually owes would be brought out in the April 1 hearing.

Investigators say in the court affidavit that Dorsey left for Mexico after selling the day-care center in 1988 and bought a 5,000-square-foot home in the country's Puerto Vallarta area. They say she attempted to conceal the proceeds from her fraudulent banking transactions by having her mother, Mary A. Carmen, launder the money through her bank account.

U.S. Customs officials said Dorsey was seen removing bundles of currency estimated at between $20,000 and $30,000 from the lining of her coat after arriving in Mexico from a commercial airline flight in December 1988.

Mark A. Epstein, a lawyer for Chase Bank, said Dorsey also defaulted on payments to two other clients of his. He represents a homebuilder that won a judgment against her in Harford County Circuit Court and a legal firm that sued her for not paying her bill.

"I think she just planned out everything she did very well," Mr. Epstein said.

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