Baltimore, Maryland – Calvin Abramowitz, age 48, of Lakewood, New Jersey, pleaded guilty today to bank fraud. As part of his guilty plea, Abramowitz has been ordered to pay $209,036.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Shawn A. Rice of the U.S. Department of Housing and Urban Development Office of Inspector General.
According to his guilty plea, Calvin Abramowitz and his brother, Philip Abramowitz, age 40, of Pikesville, Maryland conspired to defraud at least one financial institution by fraudulently obtaining Federal Housing Administration (FHA) loans and property under false pretenses. Specifically, Philip Abramowitz used his company 163 N. Potomac St., LLC., to facilitate the fraudulent sales of his Potomac Street, Baltimore, Maryland properties.
In May 2016, Philip Abramowitz decided to sell one of the Potomac Street properties (Property 1) to his brother, Calvin Abramowitz for $300,000 using an FHA-insured loan. The FHA is part of the U.S. Department of Housing and Urban Development (HUD) and provides mortgage insurance on 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 familial or business relationship between the seller and buyer, and disclose the source of the money the buyer intends to use for the down payment and closing costs.
As stated in his guilty plea, Calvin Abramowitz applied for and received a $294,566 FHA-insured loan with a mortgage company (Mortgage Company 1) by falsely representing Philip Abramowitz’s bank account records as his own. The defendants also concealed their familial relation from Mortgage Company 1 by submitting false company filings during the loan application process, having Philip Abramowitz’s property manager (Property Manager 1) pose as the sole seller and manager of 163 N. Potomac St., LLC and arranging Property Manager 1 to sign the FHA-loan contact as the official seller of the property. Philip Abramowitz’s ownership of 163 N, Potomac St., LLC. or involvement in the sale was never disclosed.
Further, to facilitate the loan underwriting process, Philip Abramowitz gave Calvin Abramowitz $10,500 to pay for the closing costs for Property 1 as Calvin Abramowitz did not have the financial means to make the purchase. Based on the fraudulent financial information presented during the loan application process, Mortgage Company 1 loaned Calvin Abramowitz $294,566 for the purchase of Property 1. The majority of the loan proceeds were subsequently deposited into Philip Abramowitz’s bank account. Ultimately, Calvin Abramowitz never used Property 1 as a primary residence and rented the property to tenants before ceasing mortgage payments and causing the property to fall into foreclosure.
Philip Abramowitz pleaded guilty to conspiracy to commit wire fraud in May 2022 and is scheduled to be sentenced on August 9, 2022, at 2:30 p.m.
Calvin Abramowitz faces a maximum sentence of 30 years in federal prison followed by 5 years of supervised release for bank fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for December 6, 2022, at 2:30 p.m.
United States Attorney Erek L. Barron commended HUD-OIG for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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