Thousands of records seized in investigation of Riverdale U.S. agents find papers at condemned complex

January 23, 1998|By Joe Nawrozki | Joe Nawrozki,SUN STAFF

Federal authorities are combing through thousands of records seized as part of an investigation of the condemned Riverdale Village Apartments in eastern Baltimore County and the property's landlord, Florida real estate mogul Richard M. Schlesinger.

Stephen M. Schenning, first assistant U.S. attorney for Maryland, said agents from the FBI and U.S. Postal Service seized the paperwork Wednesday from two locations on Orville Road in Essex and the boarded-up rental office at Riverdale in the 1800 and 1900 blocks of Eastern Blvd.

"It is documentary evidence that filled more than eight filing cabinets," Schenning said. "We hope it will further our investigation of Mr. Schlesinger and Riverdale."

Much of the material taken from Riverdale was waterlogged because of a building fire set last year by an arsonist and extinguished by the county Fire Department. The Orville Road properties -- a former beauty shop and movie theater -- had also been used as offices for the apartment complex.

Neither Schlesinger, who lives in Palm Beach, Fla., nor his attorney in Maryland, Ronald G. Kane, returned phone calls yesterday.

No federal charges have been filed against Schlesinger. Authorities said the primary focus of the investigation centers on whether profits were skimmed from the apartment complex while Schlesinger failed to pay a multimillion-dollar, federally insured mortgage.

Prosecutors started their examination after they received from the U.S. Department of Housing and Urban Development an audit of Schlesinger's business relationships.

One issue addressed in that audit centers on Schlesinger collecting thousands of dollars in federal rent subsidies after defaulting on a $5.4 million, HUD-backed mortgage, say sources familiar with the investigation.

HUD was left with $8 million in unpaid mortgage payments, including interest.

The investigation involves only the half of the complex closest to Eastern Boulevard, the section HUD foreclosed on last year.

The other half, vacated by more than 400 residents in June after utilities were shut off, is owned by a Schlesinger-run company. It was mortgaged through a bank and was not backed by a HUD guarantee.

This month, Kane appealed county fines of $277,000 against Schlesinger for code violations.

The buildings at the Riverdale complex await demolition. The last tenants were evacuated after Baltimore Gas and Electric Co. turned off power because of overdue bills of more than $600,000.

Pub Date: 1/23/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.