Baltimore business owner pleads guilty to conspiracy to commit wire fraud in connection with sale of two Baltimore properties | USAO-MD

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Baltimore, Maryland – Philip Abramowitz, 50, of Pikesville, Maryland, yesterday pleaded guilty to wire fraud conspiracy. As part of his guilty plea, Abramowitz is ordered to pay $373,684 in damages.

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Counsel Shawn A. Rice from the Office of the Inspector General of the US Department of Housing and Urban Development.

According to his guilty plea, from May 2016 to April 2017, Abramowitz and others conspired to defraud two financial institutions by fraudulently obtaining Federal Housing Administration (FHA) loans and property under false pretenses. Specifically, Abramowitz used his company, 163 N. Potomac St., LLC., to facilitate the fraudulent sale of his properties on Potomac Street, Baltimore, Maryland.

For example, in May 2016, Abramowitz sold one of his properties on Potomac Street (Lot 1) to a family member (Relative 1) and entered into an agreement with Relative 1 to purchase the property using an FHA-insured loan. The FHA is part of the U.S. Department of Housing and Urban Development (HUD) and provides mortgage insurance for loans made by FHA-approved lenders. To qualify for the FHA-insured loans, the buyer must use the residence as their primary residence, disclose any family or business ties between the seller and the buyer, and disclose the source of the money used by the buyer for down payment and closing want cost.

As stated in his guilty plea, Relative 1 applied for and received a $294,566 FHA-insured loan from a mortgage company (Mortgage Company 1) by misrepresenting Abramowitz’s bank account records as his own. Relative 1 and Abramowitz also concealed their family relationship from Mortgage Company 1 by submitting false company records during the loan application process, with Abramowitz’s property manager (Property Manager 1) posing as the sole seller and manager of 163 N. Potomac St., LLC and hiring the property manager 1 to sign the FHA loan agreement as the official seller of the property. Abramowitz’s ownership of 163 N, Potomac St., LLC. or involvement in the sale was never disclosed.

To meet the requirements of the loan procurement process, Abramowitz gave Relative 1 $10,500 to pay for the closing costs of Property 1 because Relative 1 did not have the financial resources to purchase it. Based on the fraudulent financial information provided during the loan application process, Mortgage Company 1 loaned Relative 1 $294,566 to purchase Property 1. The majority of the loan proceeds were subsequently deposited into Abramowitz’s bank account. Ultimately, Relative 1 never used Property 1 as his primary residence and rented the property to tenants for a year before stopping mortgage payments and allowing foreclosure on the property.

In addition, Abramowitz arranged the sale of his second property on Potomac Street (Property 2) to another family member (Relative 2) in March 2017 using an FHA-insured loan. To facilitate the sale of Property 2, Relative 2 applied for an FHA-insured loan from another mortgage company (Mortgage Company 2). In the same manner to defraud Mortgage Company 1, Abramowitz concealed his family relationship with Relative 2, falsely listed his property manager as the sole seller and owner of Property 2, and filed several fraudulent documents with Mortgage Company 2, including an LLC affidavit that no other person or entity had ownership of Property 2.

In a manner similar to the sale of Lot 1, Abramowitz violated FHA loan requirements by providing Relatives 2 with $8,750 towards closing costs of the sale, misrepresenting his own bank account information as that of Relatives 2 in the FHA loan origination process, and who received the bulk of the Loan proceeds go to his personal bank account. Relative 2 never used Property 2 as a primary residence or made monthly mortgage payments to Mortgage Company 2, which resulted in the property going into foreclosure.

Abramowitz faces a maximum of 30 years in prison followed by 5 years of supervised release for conspiracy to wire fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for August 9, 2022 at 2:30 p.m

US Attorney Erek L. Barron commended the HUD-OIG for their work on the investigation. Mr. Barron thanked Assistant US Attorney Martin J. Clarke, who is prosecuting the federal case.

For more information about the Maryland United States Attorney’s Office, its priorities, and resources available to support the community, visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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