18-month prison term in flip case

Man admits involvement in real-estate scheme

May 25, 2002|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A Perry Hall man who played what the government called a minor role in a major property-flipping scheme was sentenced yesterday to 18 months in federal prison.

Martin Charles Wyatt had pleaded guilty last month to conspiracy to make false statements.

He admitted that he had signed three government-backed mortgages that William Otto Schmidbauer, a Perry Hall real estate broker, obtained for him using falsified documents. In two cases, Schmidbauer made large profits, selling the houses to Wyatt for price increases of about 400 percent within days of buying them.

Wyatt subsequently defaulted on the three mortgages and the Federal Housing Administration, which insured the loans, lost $155,243.

U.S. District Judge William M. Nickerson also ordered three years of supervised release for Wyatt. He is also ordered to pay $60,243 in restitution, but the judge set a nominal payment schedule of $30 a month during his supervised release.

Another defendant in the case, Crystal Sue Perry, pleaded guilty this week to a single count of conspiracy to make false statements. She admitted that she had signed two mortgages on which Schmidbauer submitted false information.

Prosecutors also described Perry's role as minor.

In one case, Schmidbauer's firm paid $15,000 for a small East Baltimore rowhouse in 1997 and sold it the same day to Perry, the girlfriend of Schmidbauer's son, for $64,900. Perry signed an FHA-insured mortgage for $64,850 and then defaulted on the loan, costing FHA $77,225, money that included the loan and other lender's costs.

Prosecutors have said the Schmidbauer case centers on 58 Baltimore-area real estate transactions where more than $4.4 million in fraudulent loans were obtained.

Perry was the 10th defendant in the case to plead guilty. According to the U.S. Attorney's Office, four others, including Schmidbauer, have agreed to plead guilty and three more are scheduled for trial in September.

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