Fraud prosecution hits unexpected end: death

Suicide: An Eastern Shore man charged with white-collar crime had agreed to a plea deal.

September 14, 2004|By Stephanie Hanes | Stephanie Hanes,SUN STAFF

Even in his final months, Gregory Dutcher was scheming, prosecutors said.

The ex-cop turned con man had been doing it for years, they said, reaching across the country from his Eastern Shore base to bilk hundreds of clients out of millions of dollars.

Lawsuits hadn't stopped him. After angry customers showed up at his office, he simply moved and took a new alias, according to court papers. An FBI raid and federal indictment last year hardly slowed him down, prosecutors said.

But this week, authorities believed, would be the end. Dutcher, 46, had agreed to plead guilty to some of the 26 charges against him. He was supposed to show up in Baltimore's federal court yesterday to do so.

Instead, on Saturday, he killed himself in his multimillion-dollar Easton home - an unexpected ending to what had been one of the largest white-collar criminal enterprises run from the Shore.

"It's been a rough road for everyone, but no one wants to hear that about a life," said Jonathan Berzack, an Atlanta-based businessman listed in the federal indictment as one of Dutcher's more than 250 victims. "That's pretty sad."

Dutcher's wife, Kimberly Ruark, is still under indictment, charged with helping her husband defraud a mortgage lender. She could not be reached for comment yesterday.

Dutcher started his scheme in 1996, prosecutors said. That's around the time, his lawyer said, he moved to the Eastern Shore, about 12 years after he resigned from the Alexandria, Va., Police Department.

It was a complex financial ruse, prosecutors said, targeting companies and individuals who needed to borrow money, often for business ventures.

Armed with dozens of bank accounts, scores of business names, false documents and forged customer testimonials on his Web site, Dutcher collected fees from clients, promising to deliver much-needed financing in return, prosecutors said.

But rather than money, he gave excuses, customers said.

"For the first 48 hours the reasons sounded plausible," said Steven Saferin, the president of MDI Entertainment, which when it dealt with Dutcher was based in Hartford, Conn. "Every hour that went by after that, they became less plausible."

Next, Dutcher's assets would seem to disappear, prosecutors said. According to the indictment, he changed bank accounts regularly, switched companies and put assets in his wife's name to avoid creditors. When he did repay clients, he did so with other customers' stolen money, prosecutors said.

Dutcher's lawyer, assistant public defender Gary W. Christopher, acknowledged that his client had a lot of unhappy customers but "there were a lot of happy ones as well."

State court records show scores of civil cases against Dutcher. Around the Eastern Shore, many contractors had been stiffed by him, said Susan Blake, an owner of Bay Country Security.

Her company installed alarm systems at his home and business, she said, but struggled to get paid.

In state court, Dutcher was charged with a variety of crimes - primarily related to bad checks and theft - but it is unclear how those cases were resolved.

In the federal criminal case, stories such as Saferin's are typical, according to the indictment.

Saferin had been looking for funding to help grow his business, and a former employee pointed him to Dutcher.

The Maryland man seemed legitimate, Saferin said. He had what seemed like a real office in Oxford and a staff that appeared professional.

According to the indictment, he also had fraudulent documents - including forged announcements of successful funding transactions that could lead a customer to believe he was a veteran financier.

So when Dutcher didn't deliver the promised money, Saferin said, it was hard to get his mind around the idea of a scam.

After some negotiations, Dutcher and Saferin's company agreed that Dutcher would give MDI Entertainment marketable securities instead of the promised funding. Not long afterward, Saferin got a call on his cell phone.

"I'm in L.A., I'm walking across Ocean Boulevard in Santa Monica and the phone rings - it's somebody from the FBI," he said. "They're telling me they got our name because they had raided his offices."

The securities, he was told, had been stolen.

He said that since his name showed up in court documents related to Dutcher, he has gotten calls from people as far away as Scandinavia with stories about being cheated by the Eastern Shore man.

"Hindsight is 20/20," Saferin said. "Looking back on it, we were all idiots."

In April 2003, a federal grand jury handed up its first indictment of Dutcher, and a judge prohibited him from conducting any financial transactions without approval from a pretrial services officer.

But prosecutors said Dutcher was soon back to his old ways, taking $75,000 from one "client" in return for a fraudulent deal.

In November 2003, according to prosecutors, Dutcher and his wife worked out a complex real estate scheme in which he managed to buy his own house, defrauding a mortgage lender of tens of thousands of dollars. The couple was trying to hide the $2.4 million house from any creditors, prosecutors said.

Maryland State police would say only that Dutcher had killed himself at home. The family, police said, had asked not to release any more details.

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