Criminal Justice

Ex-Baltimore prosecutor Marilyn Mosby convicted of mortgage fraud

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AP Marilyn Mosby

Then-Baltimore State’s Attorney Marilyn Mosby speaks during a news conference in December 2019 in Baltimore. (Photo by Julio Cortez/The Associated Press)

A federal jury on Tuesday convicted the former top prosecutor in Baltimore, Marilyn Mosby, of lying to a mortgage lender in 2021 as she purchased a vacation property in Florida that she called her “private oasis.”

U.S. authorities in Maryland alleged that Mosby, 44, lied to mortgage lenders while purchasing two Florida vacation homes—one in Kissimmee, just minutes from Disney World, and a beach condominium in Longboat Key. After deliberating for one day, the jury acquitted Mosby of fraud related to the first property but convicted her of making a false statement to a mortgage lender in 2021 to acquire the second one. Mosby sobbed as the verdicts were read.

A former Baltimore state’s attorney who unsuccessfully prosecuted six of the city’s police officers in the 2015 death of Freddie Gray, Mosby was convicted of perjury in a separate trial in November over her moves to withdraw $90,000 from retirement funds, which she used as down payments for the Florida homes. In that case, prosecutors argued that Mosby falsely claimed she was experiencing financial hardships during the coronavirus pandemic to access the money through a Cares Act program.

Mosby lost her bid for reelection in a 2022 primary, and she now faces the prospect of decades in prison when she is sentenced later this year in U.S. District Court in Greenbelt. She is appealing the perjury convictions.

On mortgage documents in 2020 and 2021, federal prosecutors said, Mosby failed to disclose that she had unpaid federal taxes and that the IRS had placed a $45,000 lien against all properties owned by her and her husband, Nick Mosby (D), the president of the Baltimore City Council.

An assistant U.S. attorney, Aaron Zelinsky, said during closing arguments that Marilyn Mosby was not the confused first-time home buyer she claimed to be and that she made 11 false statements to mortgage lenders to secure a better deal and favorable interest rates on the vacation homes.

“She was the top prosecutor in the city of Baltimore and oversaw hundreds of lawyers,” Zelinsky said. “You know what prosecutors know a lot about? Fraud. Mortgage fraud.”

Mosby testified she was aware of the unpaid taxes when she submitted the first loan application in July 2020 but thought her husband was making timely payments on an installment plan with the IRS. Mosby’s public defenders argued that she was a home-buying “novice” who was misled by her husband and mortgage broker. On the witness stand, Nick Mosby told the jury he spent years hiding the couple’s tax debts from Marilyn Mosby, who had threatened to leave him unless he sorted out his finances.

“Throughout this entire process, I lied to her about everything being OK with the taxes,” Nick Mosby testified.

The mortgage-fraud trial revealed how the Mosbys’ marriage was eroding behind the scenes as the couple climbed in Baltimore’s city ranks. Nick Mosby felt “wounded” when his wife gained prominence in her own right as Baltimore’s top prosecutor and began to earn more money than he did, according to Maggie Grace, a public defender for Marilyn Mosby.

“Fix this, or I’m leaving,” Marilyn Mosby told her husband at one point about the unpaid taxes, according to Grace. Nick Mosby held a news conference in late 2020 claiming he had paid back all the tax debt, but that turned out to be another lie, according to lawyers in the case. The Mosbys have since divorced.

“We don’t give up easily on people we love,” Grace said. “The reality of life is messy and complicated, but complicated does not mean criminal.”

She said Mosby consulted with real estate and mortgage experts while filling out the loan application documents in good faith, even if she “made some mistakes, perhaps, in a very complicated process with which she was not familiar.” Grace said Mosby did not “bury her head in the sand” but was busy with her high-intensity job as Baltimore’s top prosecutor at the same time that she and her husband were having a breakdown in communication.

“Ms. Mosby is not an accountant. She’s not a tax lawyer,” Grace told the jury. “Even a lawyer, even a state’s attorney, can make mistakes by not reading documents, or not reading them closely enough.”

Prosecutors called it “willful blindness” and said neither Mosby had been a credible trial witness. Nick Mosby had a laundry list of financial troubles that his wife had to know about, they said. His wages were garnished because of unpaid student loans, his car was repossessed, and he was behind on his mortgage, according to trial testimony.

In his final remarks to the jury, Assistant U.S. Attorney Sean Delaney said he agreed with Grace that Mosby did not bury her head in the sand. “She got an excavator, dug a hole 40 feet deep, and jumped inside,” he said.

In early 2021, Marilyn Mosby transferred $5,000 to her husband’s account, only to have it returned to her as a “gift” from a disinterested party, which would help her lock down a favorable interest rate in one of the Florida properties, prosecutors alleged. The jury said its guilty verdict was based on this false statement.

But jurors did not find that the other statements, including statements on mortgage applications indicating she had no tax debt, were criminal. The IRS mailed dozens of unpaid-tax notices to the couple’s Baltimore home over five years, according to an expert testifying at trial. Delaney mocked the idea that Nick Mosby would “stand by the mailbox, like Harry Potter,” intercepting and secreting all that mail before his wife could see it.

Prosecutors also alleged that Marilyn Mosby signed a “second home rider” on the Kissimmee property—which had eight bedrooms, six bathrooms and a pool—that allowed her to obtain a lower mortgage rate. But that boon was contingent on a promise that Mosby would use the property primarily as a second home. Instead, Mosby hired a property management company, Executive Villas, to rent the home when she wasn’t there, and had to book her own stays through that company, according to a contract she signed.

Mosby testified that she “did not read every single document” she signed in September 2020 when she closed on the Kissimmee home and that she did not recall specifically signing the second home rider. Grace said Mosby rented out the property, “as she believed she was able and allowed to do.”

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