Judge sentences Pa. woman to 5 years' probation for role in property flipping scheme

Ordered to pay $1,500 in restitution to HUD

February 25, 2003|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A Pennsylvania woman who admitted signing $1 million worth of fraudulent government-backed mortgages using different names was sentenced in Baltimore's federal court yesterday to five years' probation, including six months of home detention.

Mary Anne Shirvani Kintop was sentenced for her role in a major property flipping scheme allegedly masterminded by William Otto Schmidbauer, a former Perry Hall real estate broker who prosecutors say made gross profits of $1.4 million in the scheme.

Kintop, 44, had pleaded guilty in June 2001 to a single count of conspiracy, admitting that at Schmidbauer's behest she had signed 15 fraudulent mortgages that were insured by the Federal Housing Administration, an agency of the U.S. Department of Housing and Urban Development.

In an article that sparked a federal investigation of Schmidbauer, The Sun reported in June 2000 that Kintop had used at least eight names, mostly variations on her name. In two cases in 1997, Kintop's daughter, then 7 years old, was named as the borrower on two mortgages.

Also yesterday, Dale Schulz, a Jarrettsville appraiser, acknowledged his participation in the scheme by pleading guilty to making false statements.

Schulz's attorney, Richard D. Bennett, called the plea agreement "very precise." Schulz admitted through Bennett only that he had "falsely represented" himself and conducted numerous appraisals performed by someone else. He also admitted "there were instances of false information in the appraisals." But, there was no admission that he knew the information was false.

Schulz, 55, "did not share in the financial bounty of Mr. Schmidbauer," Bennett said.

Asked after the hearing who prepared the appraisals, Bennett said, "I can't go into that."

Schulz is scheduled for sentencing April 25, and could get 15 to 21 months in prison under federal sentencing guidelines.

Later yesterday, Donna Hart of Essex was sentenced to five years' probation after her admission that she had signed three mortgages that Schmidbauer fraudulently obtained.

Eighteen defendants, including Schmidbauer, have been charged in the flipping scheme and have either pleaded guilty or agreed to plead guilty.

Schmidbauer, who has not yet appeared in court to enter his anticipated guilty plea, often bought properties in poor condition at low prices and quickly sold them at much higher prices. Prosecutors say he sometimes used "straw" buyers such as Kintop and obtained FHA-backed mortgages for his buyers using falsified documents. The buyers frequently defaulted, forcing FHA to pay off lenders.

In April 2001, prosecutors said the bad loans had cost FHA nearly $4 million.

In some deals, prosecutors say, Schmidbauer didn't actually own the houses, but his real estate firm handled the sales.

Kintop admitted that Schmidbauer paid her $500 to $700 each time that she signed a fraudulent mortgage and said he provided the false identities she used.

Kintop was ordered to pay HUD $790,744 in restitution by U.S. District Judge William M. Nickerson, but he acknowledged her inability to comply on a $250-a-week salary. He ordered "nominal" payments of $25 a month during the five years of probation -- a total of $1,500.

"She's a very small player in a very large conspiracy," Beth M. Farber, an assistant federal public defender representing Kintop, told Nickerson.

"I really made a mistake, and I apologize for what I did," Kintop told the judge. She said Schmidbauer had been a friend of her father's.

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