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For Immediate Release
September 10, 2004
Media Contact:
Kevin Enright 410-576-6357

CONSUMER PROTECTION DIVISION ISSUES CEASE AND DESIST ORDER AGAINST BALTIMORE AREA BUILDERS

Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has issued a cease and desist order requiring two related home builders and their principals to pay more than $605,362.50 in restitution for taking deposits and payments from consumers but failing to complete consumers’ homes.

The Division’s order found that JAE Developers of 4510 M Eli Drive, Owings Mills, Maryland and JAE Homes, Inc. of 4015 Dorchester Road, Baltimore, Maryland 21207, and their principals Kimberly Zahrey and Walter Osborne Ely, Jr. entered into contracts with consumers to construct homes in the Baltimore City and Baltimore County area, accepted partial payment from those consumers, and promised to begin construction. To date, however, JAE Developers and JAE Homes have either failed to begin or complete construction on a number of homes and have not refunded the monies paid.

The Division alleges that JAE Developers, JAE Homes, Inc., Zahrey and Ely violated Maryland’s New Homes Deposits Act by failing to place deposits and payments into an escrow account or having a surety bond to cover the deposits, that they violated the Home Builder Registration Act by acting as a home builder while not registered with the Division’s Home Builder Registration Unit, and that they violated the Consumer Protection Act by failing to build the homes as promised.

“ Under Maryland law, home builders must protect a customer’s deposit until the house is completed or they refund the deposit,” said Attorney General Curran. “Builders who fail to protect consumers’ money will be prosecuted.”

The Division’s cease and desist order immediately bars JAE Developers, JAE Homes, Inc., Zahrey and Ely, from acting or offering to act as a home builder in the State of Maryland and requires them to refund $605,362.50 they collected from seven consumers and pay additional restitution to any other consumers who have been harmed by their unlawful practices. At a hearing set for November, the Division will ask for an order requiring them to pay a $1,000 civil penalty for each violation and the costs of the investigation.

The public hearing on the charges will be held at the Maryland Office of Administrative Hearings, 11101 Gilroy Road, Hunt Valley, Md., on November 30, 2004. Consumers who may have had problems with JAE Developers, JAE Homes, Inc. or their principals Kimberly Zahrey and Walter Osborne Ely, Jr. should call the Home Builder Registration Unit immediately at (410) 576-6573 or toll-free 1-877-259-4525.

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