Man pleads guilty to role in property flipping case

April 23, 2002|BY A SUN STAFF WRITER

The son of a Perry Hall real estate broker admitted yesterday to helping his father in an extensive property flipping and mortgage fraud scheme that allegedly cost the federal government nearly $4 million.

Steven Todd Schmidbauer, 40, pleaded guilty in U.S. District Court to conspiracy to make false statements. In two instances, he signed falsified documents to get government-backed mortgages arranged by his father, William Otto Schmidbauer. In both cases, Steven Schmidbauer defaulted on the loan, costing the government $161,151, court records show.

William Schmidbauer was accused in an 11-count indictment last year of helping buyers obtain mortgages worth $4.4 million on 58 houses in Baltimore - 48 of which ended in default. As a result, the Federal Housing Administration, a branch of the U.S. Department of Housing and Urban Development, paid more than $3.9 million in insurance claims filed by mortgage lenders.

In several cases, William Schmidbauer purchased houses in the name of his company, Schmidbauer Realty, and then quickly resold them at substantially higher prices, court records show. In June 1997, for instance, he paid $20,000 for a house in the 400 block of N. Highland Ave., and then sold it the same day to his son for $69,900, using a government-backed loan.

Steven Schmidbauer is the ninth defendant in the case to plead guilty. U.S. District Judge William M. Nickerson scheduled his sentencing for Oct. 4.

Of the remaining defendants, William Schmidbauer and four others have agreed to plead guilty, according to prosecutors, and three are to stand trial in September.

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