Builder admits luxury home scam Buyers, title firm bilked by Hill ANNE ARUNDEL COUNTY

June 29, 1993|By Norris P. West | Norris P. West,Staff Writer

Christopher H. Hill, a former builder of luxury homes in Maryland, admitted yesterday to bilking homebuyers and a title insurance company of $3 million in a construction-loan scheme.

Hill, 40, pleaded guilty in U.S. District Court in Baltimore to one count of wire fraud and one count of mail fraud. A plea agreement with federal prosecutors calls for him to receive a prison term of 24 to 36 months at his Sept. 17 sentencing before DTC Judge Frank A. Kaufman.

He was arrested by the FBI in an early-morning raid March 10 and is being held at the Talbot County Detention Center. He appeared in court wearing a dark green shirt, gray sweat pants and sneakers. He sat beside his lawyer, Alan C. Drew, rising to respond with brief answers to each of the judge's questions about the plea agreement.

In a statement signed June 21, he agreed to plead guilty to two counts of a 13-count indictment. Judge Kaufman yesterday advised him that admitting his guilt would deprive him of a right to a jury trial.

"I believe I am making an informed, knowledgeable decision, your honor, in my best interests," responded Hill, a disbarred lawyer.

A statement of facts agreed to by Mr. Drew and Assistant U.S. Attorneys W. Warren Hamel and Geoffrey R. Garinther says that Hill initiated a scheme to defraud homeowners and a title insurance company in 1988.

Court papers say that his Arnold-based American Homes Corp. obtained financing from area banks to build homes in Anne Arundel, Prince George's and Baltimore counties.

He sent customers to a title company he owned, North American Title Corp., in Glen Burnie. He instructed American Homes employees to tell customers that they would save money by using North American Title, court papers say. The customers were not told that Hill owned both companies.

Customers were told that the construction loans would be paid off within 48 hours of settlement and that homeowners would have clear title to the property.

However, Hill told title company employees to withhold repayment of construction loans after receiving money from the buyers' lenders. He instead used some of the money to pay expenses for his companies and for his personal benefit, court papers say.

The FBI launched its investigation of him in 1989, after construction lenders moved to foreclose on some of the 24 buyers of his luxury homes in Maryland.

The federal wire and mail fraud charges were brought because Hill used the U.S. mail and wire transfers to carry out the illegal practices.

Stewart Title Guaranty, a Texas company that insured Hill's title firm, absorbed the loss and paid $2.98 million in unpaid loans and to obtain lien releases and clear title for homebuyers.

Stewart Title won an $8 million judgment against Hill in Anne Arundel Circuit Court in 1989.

Hill, a graduate of the University of Maryland Law School, agreed to disbarment in 1987 to avoid facing a $24 million lawsuit in connection with a home-sale scam.

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