Defendant in property flipping case gets 37 months in federal prison

Calif. man is the third of 4 men to be sentenced

April 10, 2003|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A key figure in a Baltimore property flipping scheme that bilked mortgage lenders out of as much as $2.5 million was sentenced to 37 months in federal prison yesterday.

Henry Kimball of La Costa, Calif., who had pleaded guilty in February to two counts of mail fraud, is the third of four defendants in the case to be sentenced. Darnell Acree of Owings Mills was sentenced last month to 15 months in prison and Bryan P. Rosenberg of Lutherville was sentenced Tuesday to 28 months.

Glenn Rosofsky of Encinitas, Calif., the fourth defendant, is scheduled for sentencing today.

A statement of facts written by Assistant U.S. Attorney Dale P. Kelberman, who prosecuted the case in U.S. District Court in Baltimore, said Kimball and Rosofsky incorporated a firm called Housemax Inc. in 1998 to buy and sell real estate in the city.

In a scheme that operated through October 2001, more than 100 low-cost houses were bought and quickly resold at inflated values to aspiring investor-landlords, the statement said. Falsified and fraudulent documents were used to obtain mortgages for the buyers; the mortgages exceeded the value of the houses that were being financed by $1.5 million to $2.5 million.

Records show that many of the properties ended up in foreclosure.

Kimball and Rosofsky moved to California and worked in the mortgage business.

Yesterday, Kimball, who had agreed to the statement of facts when he pleaded guilty in February, tried to minimize his role in the scheme, saying he was not as involved as his co-defendants and didn't make as much money as they did. Kimball, 38, also objected because federal guidelines required that he get a longer term as a result of four prior misdemeanor convictions and because he was on probation when he was involved in the illegal flipping scheme.

"I made some mistakes," Kimball told U.S. District Judge Marvin J. Garbis, but complained that he was getting a heavier sentence than defendants in other flipping cases. At one point, he turned to Kelberman, the prosecutor who had recommended the 37-month term, and said, "He's over here ruining my family's life."

He added, "You'll get what's coming."

Kimball's attorney, Paul R. Kramer, linked his client's record to a long-standing drug addiction, "which he has been fighting."

Garbis responded, "I just can't make drug addiction a mitigating factor."

In another flipping case, a man from Zimbabwe, who federal authorities claim is in the United States illegally, was ordered held in prison until his September trial on a bank fraud charge. Magistrate Judge James K. Breder said that he didn't consider the defendant, Makushamari Gozo, 30, trustworthy and that there was a "serious risk" he wouldn't appear for trial if released.

Gozo came to the United States on a student visa that expired in 1999. He has been in jail since his arrest in August.

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