Man gets 6 months in case of flipping

Judge recommends halfway house for Pikesville resident

August 30, 2002|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A Pikesville man whose illegal property flipping defrauded lenders out of as much as $2.5 million was sentenced to six months yesterday by a federal judge who recommended that he be sent to a halfway house.

Leon Wilkowsky was also ordered to serve six months' home detention after he leaves the halfway house, to be followed by three years of supervised release and 400 hours of community service. He was also ordered to pay $25,000 apiece to two community organizations that are trying to cope with the effects of flipping.

U.S. District Judge J. Frederick Motz told Wilkowsky that he would be allowed to work during his time at the halfway house and while on home detention and that he wouldn't order electronic monitoring during home detention.

He gave Wilkowsky, 39, a substantial break because of his "family circumstances" and his cooperation with prosecutors.

Karen R. Wilkowsky, the defendant's wife, testified in detail about her five-year battle with breast cancer and its impact on the couple and their two children.

She said she feared that her husband's imprisonment would cause her stress that would trigger a relapse of the disease.

Wilkowsky pleaded guilty in November to a single count of mail fraud, admitting involvement in property flipping from 1997 to the end of 2000. Real estate records show that he flipped more than 100 houses.

Flipping schemes involve the purchase of low-cost properties and their quick resale at inflated values, using falsified documents to obtain mortgage loans for the buyers. Some flippers seek prospective homeowners as buyers; others, including Wilkowsky, look for aspiring landlords who are willing to buy more than one house.

Mortgages that Wilkowsky obtained for his buyers exceeded the value of the houses he sold by $1.5 million to $2.5 million, according to court documents.

Arguing for a prison sentence for Wilkowsky, Assistant U.S. Attorney Joseph L. Evans cited the deterioration of sections of Baltimore where flipping has been concentrated.

Evans said that, like the Wilkowskys, some of the people in these neighborhoods have "horrible personal circumstances ... a host of ills that have been visited on them through no fault of their own."

"They now live in a neighborhood that is crumbling around them," he said.

A contrite Wilkowsky told Motz, "I knew that flipping was wrong, but I did it anyway."

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