BALTIMORE, AUG. 25 -- Prince George's County real estate dealer Donald P. Harman was sentenced to four years' imprisonment today after pleading guilty to a scheme to bilk more than $200,000 from mortgage banks in the purchase and fraudulent resale of substandard houses in the county in 1984 and 1985.
U.S. District Judge Frank A. Kaufman imposed the sentence after Harman, 51, a longtime Washington area real estate agent, acknowledged falsifying the creditworthiness of low-income buyers to help them qualify for mortgages to purchase houses he then sold to them at what prosecutors said were inflated prices.
The buyers, often working in collusion with Harman, lived in the houses for up to a year without making any mortgage payments before the foreclosure process caught up with them and they had to leave, according to investigators.
They said the scheme involved dozens of home buyers and losses of up to $900,000 to mortgage loaners and federal insurers. Harman acknowledged losses of no more than $230,000, an amount Kaufman ordered him to pay in restitution.
Harman's secretary, Joyce Elaine Francis, pleaded guilty to participating in the scheme and was sentenced last week to two months in prison. The home buyers were not charged in exchange for their cooperation in the case, investigators said.
Harman was convicted of a similar scheme in Montgomery County in 1983 and was sentenced to six months.
In the Prince George's case, according to federal prosecutor Barbara S. Sale, Harman bought a series of low-cost properties in the Seat Pleasant-Capitol Heights area, made "cosmetic" improvements to them and sold them at prices "far in excess of the price he paid."
Typically, investigators said, he would buy a house for $30,000, make $5,000 in improvements, and sell it for $60,000 to $65,000.
The buyers would sign phony employment papers and other documents created by Harman to enhance their credit-worthiness in applying for mortgage loans, according to investigators. Documents included federal W-2 forms showing inflated income and letters purporting to bestow gifts up to $5,000 on the buyers from nonexistent relatives, investigators said.