Levitt sued by mother over alleged fraud

Charges of stock, credit card schemes may affect his parole

April 07, 1999|By Michael James | Michael James,SUN STAFF

Jeffrey A. Levitt, Maryland's infamous swindler who once plunged the state into perhaps its darkest financial disaster, is in trouble again -- this time with his 87-year-old mother, who's suing him for using her credit cards and allegedly bamboozling her in a stock scheme.

Maryland authorities have begun an investigation into Nettie Levitt-Gilbert's claims, filed in Florida, to find out whether her son committed crimes that would violate his parole. Levitt earned prison release in 1993 after serving nearly eight years of a 30-year sentence for embezzling $14.6 million from his thrift, Old Court Savings & Loan.

"We're concerned, and we've asked Florida to complete a full investigation," said Leonard A. Sipes Jr., a spokesman for the Maryland Division of Correction. "If he's convicted of credit card fraud, there is a possibility of his return to Maryland to finish his sentence."

Working as a cigar salesman in Boynton Beach, Fla., Levitt, 56, denied his mother's allegations, which are spelled out in a lawsuit filed in Palm Beach County Circuit Court.

"I swear to God I didn't do anything illegal," said Levitt, who in the mid-1980s stood atop a financial empire in Baltimore that came crashing down during the S&L scandal. "I wouldn't steal a nickel from my mother."

Levitt-Gilbert alleges otherwise. Among other things, she claims Levitt conned her out of money last year when she was weak and about to undergo gallbladder surgery.

Hospital-bed request

She contends that Levitt approached her in her hospital bed, saying that he was in desperate need of money "and that lending money to him was the last thing she should do before she dies," the lawsuit said.

At that time, Levitt-Gilbert voluntarily gave her son cash and two personal credit cards, which he used to run up more than $7,000 in charges that he did not repay, the lawsuit said. In addition, Levitt ran up charges on other credit accounts she did not give him permission to use, the lawsuit said.

Levitt obtained access to at least 11 credit card accounts in his name, his mother's name or in the name of his late stepfather, Richard Gilbert, the lawsuit alleged. Gilbert is also named in the suit as a plaintiff.

"Levitt signed the credit cards issued in the name of one or both of the plaintiffs, in violations of the Florida Credit Card Crime Act," his mother alleged in court papers. "The credit cards were issued to Levitt without the request, knowledge or consent of the plaintiffs."

Reached at Dan's News, a shop he runs off a coastal highway in downtown Boynton Beach that is the headquarters for his cigar business, Levitt said this week that he is sure he'll be vindicated.

"I needed credit, and my mother approved me using the credit cards," he said, adding that the dispute is "a family matter" that will be resolved soon.

"I'm squeaky-clean on this," he said. "I've been running a good business, and I have major, major customers all over the country. I don't have time to do anything criminal."

Rags to riches to rags

The allegations are the latest in a long string of claims against Levitt, whose life has been fraught with rags-to-riches-to-rags stories, garish wealth, criminal accusations and public scorn.

A former Baltimore slumlord turned financial entrepreneur, he rocked Maryland in 1985 with the Old Court scandal. Panicked depositors staged a run on the institution, regulators froze $9 billion in S&L accounts throughout the state and Levitt became despised by tens of thousands of irate Marylanders who couldn't get their money.

He came to symbolize the opulence and greed of the S&L era, at one time owning four Rolls-Royces and an $18,000 putting green. He filled his Lutherville home with silver and Steuben glass.

But he said he has moved beyond materialism.

"I just want to be left alone to run my business," he said.

His mother also claims in the lawsuit that Levitt defrauded her of $21,500 in October 1995 by telling her that he would invest the cash in a money-market account. But Levitt put the money into a Bear, Stearns Securities Corp. account that he used "for his personal benefit," the lawsuit said.

Neither Levitt-Gilbert nor her attorney could be reached. She is suing for breach of contract, fraud and credit card violations.

Levitt has been legally living in Florida since shortly after his release from prison. A paroled felon is allowed to move to another state, provided that he receives permission from his parole supervisor and that the other state agrees to oversee the conditions of his release.

Maryland parole officials gave Levitt such permission. Under terms of the agreement, Levitt is assigned a Florida parole agent who monitors him and reports any violations to Maryland authorities.

Sipes, of the Maryland Division of Correction, said yesterday that state officials received word of the lawsuit just this week, and that it is too early to say what will happen in the investigation.

"If he's convicted of something, he could be in violation," Sipes said. "But right now, it's an allegation, and we have no idea yet whether he violated the terms of his parole."

Levitt's attorney, Jonathan Bloom, called the lawsuit "frivolous" and said the dispute amounted to a family fight.

"It's a stupid lawsuit, and we're going to win. All of the allegations are hearsay," Bloom said. "The case is in my joke file."

Pub Date: 4/07/99

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