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For Immediate Release
May 16, 2005
Media Contact:
Kevin Enright 410-576-6357

COURT OF APPEALS HOLDS PERPETRATORS LIABLE IN REAL ESTATE FLIPPING CASE
Sellers, Lenders and Appraisers Liable to Pay Restitution and Penalties


Shpritz, American Skycorp, and Others Liable to Pay Restitution and Penalties
Attorney General J. Joseph Curran, Jr., announced today that the Court of Appeals has affirmed an October 2002 ruling by the Attorney General’s Office’s Consumer Protection Division that four men and five companies violated Maryland law when they used unfair and deceptive practices to sell homes to consumers, usually first-time home buyers with poor credit, a practice known as "flipping."

Lee Shpritz, a property investor, bought and sold properties though the Baltimore-based companies L&R Properties, Inc., West Star Properties, Inc., and West Star Company, LLC. The houses sold by Shpritz were financed by Timonium-based mortgage lender American Skycorp, Inc., which was owned by Lee P. Woody, III. Appraisers that were used for these transactions included John M. Morgan, Jr., Michael Almony, and Almony Appraisal Services, LLC. Most of the houses sold were in or around the Belair-Edison neighborhood in Baltimore City. The Court upheld a finding that Lee Shpritz and his companies, American Skycorp, Inc., Lee P. Woody, III, and John M. Morgan, Jr. had engaged in a flipping scheme to sell and finance properties at inflated values. Additionally, the court upheld a finding that Michael Almony, and Almony Appraisal Services, LLC misled homebuyers by submitting misleading inflated appraisals.

" Property flipping hurts homebuyers, and creates significant problems for the neighborhoods in which the homes are located," said Curran. "I am pleased that the Court of Appeals has affirmed the Consumer Protection Division’s decision that these men and companies violated Maryland law and should be held responsible for that."

The companies and individuals found to have violated the Consumer Protection Act are prohibited from engaging in these types of practices and will have to pay restitution and civil penalties. On an issue that the Court of Appeals described as one on which it had not previously ruled, the Court of Appeals held that the sellers, the lender and one of the appraisers were properly held jointly and severally liable for restitution under the Maryland Consumer Protection Act. The Court of Appeals did remand the case for further proceedings relating to determining the amount of restitution that should be ordered.

   

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