Builder may face jail for filling in wetlands Stiff fines could make company go bankrupt

June 17, 1996|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

To friends and business associates, James J. Wilson is an exemplary real estate developer, as dedicated to preserving trees as to pursuing a profit. The huge, Columbia-style community of St. Charles he is building in Charles County even earned praise from the state several years ago for efforts to curb pollution of Southern Maryland's streams.

But to federal prosecutors, James Wilson is a criminal whose actions belied his professed concern for the environment. He was convicted in February by a U.S. District Court jury of directing his employees to fill 70 acres of wetlands, which prosecutors say are vital "natural kidneys" protecting the Potomac River and Chesapeake Bay from pollution.

Today, a federal judge in Greenbelt must sort out these starkly conflicting portrayals of Wilson and the companies he controls.

The 63-year-old multimillionaire, who lives with his wife on a 400-acre horse farm in Middleburg, Va., could go to prison for three to five years.

Prosecutors are asking that Wilson, who has real estate and horse-racing interests in Puerto Rico, be fined as much as $1.5 million and pay $500,000 in restitution to a wildlife foundation. The sentence to be imposed by Judge Alexander Williams Jr. also could affect the bottom line of Interstate General Co., the development firm Wilson founded 39 years ago, and an affiliate, St. Charles Associates.

Along with Wilson, IGC and St. Charles were convicted in the seven-week trial of illegally filling federally protected wetlands from 1988 through 1993. Wilson, who is now IGC's chairman, was president and chief executive officer at the time.

Federal prosecutors are seeking $5.5 million in fines from the companies, plus restoration of damaged wetlands.

Wilson and other company officials declined requests for an interview, saying through a spokesman they did not want to comment before the sentencing hearing.

But IGC's lawyer warned that a multimillion-dollar fine could have dire consequences for the developer, for St. Charles and for Charles County.

In a letter filed in court, lawyer Bruce A. Baird said that "an overly harsh sentence" could push IGC into immediate bankruptcy. That could force the company to sell its remaining undeveloped land at St. Charles, the lawyer said, depressing property values and stimulating "unplanned sprawl."

The 9,100-acre St. Charles, which is only halfway complete, is home to 35,000 people, about one-fourth of the county's population. The company has offered to donate 475 acres for creation of a "conservation area," in lieu of paying a huge fine.

Federal prosecutors likewise would not discuss the case. But in court papers filed last week, they dismissed the offered land as mostly undevelopable and worthless. They also disputed IGC's predictions of fiscal collapse.

Assistant U.S. Attorneys Jane F. Barrett and James C. Howard called "the defendants' protestations of poverty and implied threats that the company will close its doors resulting in economic catastrophe" a form of "economic terrorism."

Such sparring typifies the acrimonious nature of this case, in which Wilson first sued the federal government in 1991, seeking compensation after it ordered him to halt construction in 1990 on a 5-acre tract deemed to be wetlands by government inspectors.

The criminal investigation began after that, prompting critics to accuse the government of seeking revenge -- a charge officials deny.

The tract that started the case remains undeveloped today, with cattails and reeds growing amid ponds and mud in a low-lying field bordered by two four-lane highways and railroad tracks.

The government claims that Wilson and the companies should have sought permits before dumping hundreds of truckloads of dirt on that tract and three other wetlands sites.

On another tract, eroding mounds of fill dirt sit behind a BJ's Wholesale Club built before officials stopped development.

Prosecutors presented evidence at the trial that the defendants were warned repeatedly by their own consultants as early as 1988 that the tracts included wetlands that should not be developed without federal permits.

Maryland has lost up to two-thirds of its wetlands, federal prosecutors noted.

Lawyers for Wilson and the companies contend the lands in question are not really wetlands, and they plan to appeal the conviction. They argued unsuccessfully at trial that the federal government's definition of wetlands was confusing, and they submitted a report to the court recently saying development of the land in dispute has had negligible impact on streams or the bay.

In seeking a lighter sentence, IGC's lawyers have submitted dozens of letters and testimonials to the generosity of Wilson and his companies in donating land and funds for schools, churches and homeless shelters.

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