Lawyer guilty in property flipping

Title firm founder says actions led to lenders losing up to $800,000

September 08, 2000|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

Federal prosecutors obtained another conviction yesterday - their fifth - in a major Baltimore property flipping case when a settlement attorney admitted his role in a fraudulent scheme that cost lenders as much as $1.5 million.

Robert C. Ness of Reisterstown, founder of Owings Mills Title Co., pleaded guilty to a single count of a 14-count indictment that charged him and four others with mail and wire fraud.

Ness admitted he aided the flipping scheme of Robert L. Beeman of Wilmington, Del., who bought more than 100 Baltimore houses and quickly resold them at substantially higher prices.

Prosecutors say Beeman and his co-defendants used falsified and misleading documents, and inflated property appraisals to obtain mortgages for low-income buyers that exceeded the value of the houses he sold them.

Ness did not dispute a prosecution statement that in conducting settlements on some of Beeman's deals, he helped deceive lenders into granting mortgages that they would not have otherwise made.

But he contended that he did not know of some of the key elements in Beeman's fraudulent transactions.

Beeman pleaded guilty last week to a single count and admitted that his fraudulent deals cost lenders $800,000 to $1.5 million. Ness acknowledged that the loss to lenders "attributable" to him was between $500,000 and $800,000.

Three other defendants have pleaded guilty in the case, which was investigated by postal inspectors. They are Michael M. Fishman and Scott R. Shinskie, principals of Macallan Funding, Inc., a defunct mortgage brokerage firm that handled many Beeman deals, and Robert L. Friedman, another settlement attorney.

The guilty plea by Ness, 52, leaves one defendant, whose trial is set to begin late this month. He is G. Samson Ugorji, an appraiser.

Five of the defendants were indicted in March. Friedman, who was not indicted because he had been cooperating with prosecutors, pleaded guilty to a single count last month.

Ness is to be sentenced Dec. 13, five days after sentencing of Beeman, Fishman and Shinskie. Prosecutors Joseph L. Evans and Carmina S. Hughes have said they will seek added prison time for them because of the "destabilizing effect" flipping has had on the city. The maximum sentence each could receive is five years in prison and a $250,000 fine. The government may demand restitution.

Friedman has not been scheduled for sentencing.

Ness would not comment after his guilty plea. Larry A. Nathans, his attorney, said in a statement that "this is a tragic day" for Ness, who "regrets his involvement in this case." Nathans said Owings Mills Title is no longer in business.

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