Maryland regulators vote to revoke license of appraiser in flipping cases

Maximum fine of $5,000 also imposed on Ugorji

July 12, 2000|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

Maryland regulators voted yesterday to revoke the license of the first real estate appraiser to be charged in the property flipping epidemic that has swept across Baltimore during the past few years.

The Maryland Real Estate Appraisers Commission also decided to fine G. Samson Ugorji, the appraiser, the maximum fine it can impose - $5,000.

Acting without comment, the commission accepted the recommendation of an administrative law judge, who held two days of public hearings in January on charges against Ugorji. The decision to revoke Ugorji's license came 2 1/2 years after a commission staff member initiated the case against him.

The commission would not release its order penalizing Ugorji.

"Until the respondent has a copy of it, it's not a public document," Mark Feinroth, an assistant secretary of the state Department of Labor, Licensing and Regulation, said of the commission order. "As a legal matter, he is entitled to it before the public is."

The appraiser commission is part of Feinroth's department.

Feinroth and other officials complained that the administrative law judge's decision recommending sanctions against Ugorji should not have been released by the judge's office in May.

State Department of Assessments and Taxation records show that more than 2,000 Baltimore houses have been bought and quickly resold for price increases of at least 100 percent during the past four years.

Often, the deals are accompanied by falsified documents and appraisals that inflated the value of the houses.

Ugorji was charged in connection with four appraisals he performed for Robert L. Beeman, a Wilmington, Del., man who has flipped more than 100 Baltimore houses in recent years, public records show.

Ugorji performed about 40 appraisals for Beeman.

In a 50-page opinion dated May 22, state administrative law judge Laurie I. Pritchard used terms such as "dishonesty and misrepresentation" and "fraudulent" to describe the four appraisals.

She said: "The commission has proven by a preponderance of the evidence that the respondent failed to exercise reasonable diligence and was at the very least negligent or incompetent in the development and preparation of the appraisals."

A federal grand jury indicted Beeman, Ugorji, two officials of a mortgage brokerage firm and a settlement lawyer in March on 14 counts of mail and wire fraud in connection with Beeman's deals. They are scheduled for trial in September.

Ugorji could not be reached for comment. His attorney, Godson M. Nnaka, had no comment, saying he had not seen the commission decision and had not been at the meeting.

He said he wasn't notified that the matter would be considered yesterday.

Ugorji has maintained his innocence and said, through his lawyer, that he was a scapegoat because other appraisers working for Beeman have not been penalized.

In April, the federal agency that oversees state appraiser commissions complained about the "unreasonably lengthy" amount of time the Maryland regulators take to process complaints.

The commission takes "an average of two years for case investigation and resolution," wrote Thomas E. Watson Jr., chairman of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council. He said most states complete action in six to 12 months.

The council was created by Congress in the wake of the savings and loan crisis of the 1980s, after investigations revealed that fraudulent appraisals were a widespread problem in the failure of financial institutions.

"Most aspects of your program function well," Watson wrote in his routine review.

In response, Gregory J. Glover, the commission chairman, wrote that steps were being taken to speed the handling of complaints, including the recruitment of volunteer appraisers to evaluate suspicious appraisals. Also, the state budget for the fiscal year that began July 1 includes $5,000 to pay outside appraisers for their evaluations.

The commission has relied on one official of the state Department of General Services to evaluate suspect appraisals.

That official, William T. Beach, evaluated the four appraisals that formed the basis of charges against Ugorji.

He testified that all four appraisals were "misleading, if not, fraudulent."

Court records show that Beeman often paid $15,000 to $20,000 for a house and performed modest cosmetic repairs before selling it for as much as $85,000.

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