Woman pleads guilty in flipping case

Former loan officer admits defrauding local bank and HUD

January 03, 2003|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A former mortgage loan officer at First Mariner Bank pleaded guilty yesterday in federal court to her role in a major property flipping scheme, acknowledging that she was responsible for losses on government-backed mortgages totaling as much as $500,000.

Patricia Ann Robinson of Joppa, who had been scheduled for trial later this month, pleaded guilty in U.S. District Court in Baltimore to a single fraud count.

She admitted submitting falsified documents to First Mariner and to the U.S. Department of Housing and Urban Development to obtain government-backed loans for homebuyers who would not otherwise have qualified for the mortgages.

The loans financed house sales by William Otto Schmidbauer, a former Perry Hall real estate agent who, prosecutors say, was the mastermind in a property flipping scheme that brought him gross profits of $1.4 million.

Schmidbauer and 16 co-defendants, including Robinson, were charged in spring 2001.

The case focused on 58 transactions involving loans of more than $4.4 million. At the time Schmidbauer was charged, prosecutors said HUD had paid more than $3.9 million to reimburse lenders for losses on 48 of those loans that had been insured by the Federal Housing Administration, a HUD agency.

Prosecutors allege that Schmidbauer purchased low-cost houses and quickly sold them at much higher prices, using fraudulent information - including false identities - to obtain mortgages for the buyers. In some cases, the prosecutors said, his real estate firm acted as the agent in suspect sales.

A dozen defendants have pleaded guilty and three others, including Schmidbauer, have agreed to plead guilty, according to prosecutors. Two loan officers who worked for firms other than First Mariner are scheduled for trial late this month.

The Sun reported on Schmidbauer's activities in June 2000. Among other things, it described how some people had posed as buyers of Schmidbauer houses and signed multiple mortgages under different names.

A Pennsylvania woman, Mary Anne Shirvani Kintop, used eight names to pose as the buyers of more than a dozen houses where government-insured loans totaling more than $1 million were obtained. In two cases, she used the name of her 7-year-old daughter.

Kintop pleaded guilty to her role in the scheme in June 2001, saying that Schmidbauer paid her $500 to $700 each for 15 transactions where she posed as a buyer. She admitted that she never saw any of the houses and had no connection with them other than signing loan papers. Kintop, who agreed to assist prosecutors, has not been sentenced.

Robinson admitted yesterday that she had submitted false W-2 statements and pay stubs to First Mariner and HUD in 1999 in order to get an $83,900 FHA-backed loan in the name of Mary A. Kintop. The money financed Schmidbauer's sale of a house in the 600 block S. Ellwood Ave. for $84,000, 12 days after Schmidbauer had paid $32,000 for it.

Robinson also agreed to disclose to prosecutors everything she knows about Schmidbauer's flipping activities.

First Mariner fired Robinson in the spring of 2000 after The Sun asked the lender about three loans made to Kintop, according to Brett Carter, president of the bank's mortgage division.

"Mortgage fraud is a very serious issue, and anybody involved should be prosecuted to the full extent of the law," Carter said. "It's a major problem in our marketplace."

U.S. District Judge William M. Nickerson scheduled Robinson's sentencing for Feb. 28. The maximum penalty she could receive is two years in prison and a $250,000 fine, but she is expected to receive a considerably lighter term under federal sentencing guidelines.

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