BALTIMORE—A federal grand jury has indicted Douglas Skibicki, age 41, of Bethesda, Maryland, on charges of mail fraud, aggravated identity theft, and bankruptcy fraud, in connection with a mortgage fraud scheme in which he allegedly defrauded lenders, family, and others. The indictment was returned on March 31, 2010 and unsealed today upon Skibicki’s arrest.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Chief William J. McMahon of the Howard County Police Department; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation - Baltimore Field Office; Special Agent in Charge Barbara Golden of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge Ken Taylor, Jr. of the Housing and Urban Development Office of Inspector General - Office of Investigations.

According to the nine-count indictment, Skibicki was a mortgage originator and/or broker for a company which operated in Laurel, Maryland. The indictment alleges that from April 2006 through August 2009, Skibicki, with the assistance of an appraiser and others, participated in a scheme to defraud lenders, family members, and others through a series of real estate transactions.

For example, Skibicki and Family Member 1 owned property at 5870 Deer Ridge Lane in Elkridge. On June 2, 2006, Skibicki allegedly submitted a loan application for $350,000 to refinance 5870 Deer Ridge Lane, in the name of Family Member 2. The loan application indicated that title to the property would be held by Skibicki, Family Member 1 and Family Member 2.

According to the indictment, Skibicki allegedly added Family Member 2 to the title of the property without consulting or obtaining the approval of either Family Member 1 or 2. To facilitate the loan application, the appraiser working with Skibicki allegedly prepared an appraisal indicating that there was a 2,040 square foot home on the property and included a description of the home and photographs purporting to be of the front and back of the home. In fact, there was no home on the property, which was a vacant lot. The indictment alleges that the loan application submitted by Skibicki on behalf of Family Member 2 also contained several false statements as to Family Member 2’s employment, income, and current address.

Further, the indictment alleges that in an attempt to conceal the fact that 5870 Deer Ridge Lane was a vacant lot and instead make it appear that there was a home on that property, and also to make it appear that Family Member 2 was earning rental income from leasing that home, Skibicki caused a fraudulent Single Family Dwelling Lease to be provided to the lender, falsely indicating that 5870 Deer Ridge Lane had been rented for a one-year term beginning on January 1, 2006, for a monthly rent payment of $2,875.

A former co-worker and longtime friend of Skibicki was listed on the lease as the real estate agent who had negotiated it, and Family Member 2 was identified on the lease as one of the landlords/owners of 5870 Deer Ridge Lane. According to the indictment, the signatures of the real estate agent and Family Member 2 were forged on this lease and neither individual had any knowledge of, or involvement with, this purported lease. Based on the fraudulent information provided by Skibicki, the lender provided a loan of $350,000 in the name of Family Member 2. The indictment alleges that the signatures of Family Members 1 and 2 were forged on the settlement statement.

The indictment alleges that Skibicki obtained mortgages on five additional properties in the names of family members and others. According to the indictment, in each instance the loan application contained false statements as to the family members and others whose names Skibicki used on the application. In some instances, the family members and others allegedly had agreed to allow Skibicki to use their names, with Skibicki promising that he would make the payments and/or remove their names from the property after some specific amount of time. However, the indictment alleges that the family members and others often had no idea that Skibicki had used their name and personal information to facilitate the transactions. The indictment further alleges that five of the properties went into foreclosure after Skibicki failed to make the promised loan payments. According to the indictment, Skibicki received loans worth $2,829,971 as a result of the scheme.

According to the indictment, after Skibicki had failed to make payments on a mortgage he had obtained in the name of a Family Member 3, the lender instituted foreclosure proceedings and the property was scheduled to be put to auction on August 11, 2009. The indictment alleges that in order to conceal his scheme, Skibicki caused a Chapter 13 bankruptcy petition to be filed on August 11, 2009, in the name of his friend, who was a co-owner of the property, in order to stop the auction of the property.

Skibicki faces a maximum sentence of 20 years in prison and a fine of $250,000 or twice the gross loss or gain of the offense, if greater than $250,000, on each of six counts of mail fraud; a mandatory two years in prison, consecutive to any other sentence, on each of two counts of aggravated identity theft; and a maximum of five years in prison for bankruptcy fraud. Skibicki had his initial appearance today at 2:30 p.m. in U.S. District Court in Baltimore and was released under the supervision of U.S. Pre-trial Services. As a condition of his release Skibicki is prohibited from working in the financial services industry. He is scheduled to be arraigned on April 16, 2010 at 2:00 p.m.

U.S. Attorney Rod J. Rosenstein recognized Howard County State’s Attorney Dario Broccolino and Chief J. Thomas Mangers of the Montgomery County Police Department, and their offices, for their assistance in this investigation and prosecution.

In a related action, Mark Kaufman, Deputy Commissioner of the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation issued a Summary Order to Cease and Desist against Skibicki today, prohibiting him from engaging in any further credit services business activities and/or foreclosure consultant activities with Maryland residents.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The trustee in a bankruptcy case tied to a multimillion-dollar mortgage fraud allegation has filed a malpractice complaint against the debtor’s brother and is seeking more than $300 million in damages.

Derek Henderson is the trustee in bankruptcy cases filed by Chris Evans of Madison County and his companies. Evans’ brother, Charles Evans, is a Jackson lawyer who handled title work for Mississippi Valley Title Co. in several of the land transactions alleged to be part of the fraud.

The FBI and U.S. attorney’s office are investigating the allegations. John Colette, the Evans brothers’ attorney in any possible criminal case, said no charges have been filed against either brother.

In his Jan. 27 complaint, Henderson alleges Charles Evans failed Chris Evans in several ways and is asking a judge to award $50 million in damages, in addition to punitive and special damages to be determined by the judge.

Tylvestor Goss, Chris Evans’ bankruptcy attorney, would not comment.

Henderson was ill Monday and could not be reached for comment. Judge Neil Olack has given Charles Evans, who is representing himself, until March 1 to respond to Henderson’s complaint.

In court documents, the brothers have been accused of getting multiple loans from various banks on individual properties, including a part of Highland Colony Parkway. Each bank believed itself to be the sole lienholder.

In his complaint, Henderson alleges Charles Evans failed to protect the assets of the companies and Chris Evans. Henderson also alleges Charles Evans allowed money and assets to be “commingled and misappropriated.”

In the filing, Henderson said Charles Evans should have known his actions were a breach that would harm his brother, the companies and their creditors.

Mississippi Valley Title issued policies insuring the accuracy of titles involved. At least $41 million in claims have been filed against Mississippi Valley Title and its parent company, Old Republic National Title Insurance Co.

Charles Evans has not filed bankruptcy, but he and his brother were both named in lawsuits filed by several banks.

After Chris Evans filed bankruptcy in October, more than 30 companies the Evans brothers set up or controlled also filed Chapter 7 bankruptcy.

Several banks in the case are asking the judge to lift the stay that prevents them from moving forward with the individual properties tied to their loans.
Henderson, however, has filed a motion asking the judge to allow him to sell the land on the open market.

In US law, Money Laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. It is the process of creating the appearance that large amounts of money obtained from serious crimes, such as real estate fraud, originated from a legitimate source. Today its definition is often expanded by government and international regulators to mean any financial transaction which generates an asset or a value as the result of an illegal act.

Jeffrey Bennett and Stephen Doherty of Doylestown-based Bennett & Doherty are charged with conspiracy to commit mail and wire fraud and conspiracy to commit money laundering and Doherty is also charged with bankruptcy fraud.

Two partners in a Pennsylvania law firm have been federally indicted along with three other defendants including two mortgage company owners in a wide-ranging alleged real estate fraud scheme.

Federal prosecutors in Philadelphia say the $14.6 million scheme involved 35 fraudulent loans, real estate deals in which purchases were made by straw buyers and false promises of help to homeowners trying to stave off foreclosure.

If convicted, Doherty could get a maximum of 385 years in prison and $4 million in fines and Bennett faces as much as 240 years and $3.2 million in fines.

“These are allegations. And now you have others wanting to join in hoping they hit a lucky number too,” says Bennett’s lawyer, George Bochetto of Bochetto & Lentz in Philadelphia. “Jeff Bennett is a fine, fine attorney who’s always worked hard on behalf of homeowners in tough situations.”