Michael Leppert convicted for making false promises about refi terms
By PATRICK CROWLEY
2/28/2005

A Maryland mortgage broker already in prison for stealing from clients is in trouble again for collecting refinance fees up front on loans where he had no chance of delivering the deals he promised.

Michael Dudley Leppert, 42, has been convicted in Baltimore County Circuit Court of defrauding 11 property owners out of $97,775, according to a statement from Maryland Attorney General J. Joseph Curran Jr.

Leppert, already serving a 10-year sentence for violating his parole from a 2001 mortgage fraud conviction, was sentenced to an additional 10 years by Judge John Grason Turnbull II. In addition Turnbull ordered civil judgments against Leppert on behalf of each of his victims. The amount of the judgments was not disclosed.

Leppert was indicted last fall by a Baltimore County grand jury.

According to court documents filed by prosecutors, Leppert was working as a broker in his brother's Owings Mills mortgage business. He met the 11 victims after arranging refinancing on their homes, prosecutors said.

"Soon after, he contacted them to offer a new refinancing at an even more attractive mortgage rate, but told them in order to lock in the deal they had to give him an upfront payment for settlement costs," according to the statement from Curran's office.

"Leppert cashed their checks for his personal use or deposited the money into his personal bank account," Curran said. "None of the victims received the refinancing that he offered or received their money back."

Leppert could have been sentenced up to 15 years. Curran's office investigated and prosecuted the case along with the Maryland State Police.

Curran also prosecuted Leppert four years ago when the mortgage broker plead guilty in a similar fraud scheme.

According to a statement Curran released at the time, Leppert targeted employees of an American Express office in Linthicum, MD. As in the later scam, Leppert took money from nine property owners -- including seven who worked at American Express -- promising to arrange refinancing on their homes.

Some of the victims had worked with Leppert in the past and trusted him, Curran said in the statement.

"His scheme was to claim that he needed money 'up front' for settlement costs before they could refinance their property," Curran said. "Once Leppert gained the confidence of a childhood acquaintance working at American Express and offered to refinance his home, this victim unwittingly spread the news of Leppert's attractive refinancing offer to his colleagues, seven of whom were victimized by Leppert."

Leppert was sentenced to 10 years in prison and ordered to pay $22,912 in restitution.

Leppert was paroled, but eventually sent back to prison for violating the terms of his probation, Curran said.

Leppert's case was one of several from Owings Mills, a Baltimore suburb that seems to be a hotbed for mortgage crimes and lawsuits.

In October of 2004, James T. Hall, an Owings Mills appraiser, and All Financial Services, a mortgage brokerage firm, were sued in federal court by a New Jersey mortgage company that claimed 6 residential mortgage loans it purchased from All Financial were so problematic they and to be repurchased from third party investors and the secondary market.

In 2003, Key Bank & Trust of Owings Mills lost its origination approval agreement with HUD, for originating too many poor performing loans.

And in January of 2002, Owings Mills mortgage broker Kent E. Baklor was sentenced to prison for his alleged involvement in a fraud scheme that defrauded lenders of more than $8.5 million.

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