Owners of Baltimore County
Home Construction Company Plead Guilty to Failing to Properly
Handle New Home Deposits
MD ( July 1, 2009) - Attorney General Douglas F.
Gansler announced today that Walter Osborne Ely, Jr., 46, and
his sister and business partner Kimberly Zahrey, 44, plead
guilty before Baltimore County Circuit Court Judge Vicki Ballou-Watts
to 6 counts of failure to hold new home sums in escrow. The
offense is a felony punishable by 15 years imprisonment and/or
a $10,000 fine.
Beginning in 2002,
as owners of JAE Developers based in Owings Mills, Ely and Zahrey
advertised new home construction at three
different sites in Baltimore County. They met with prospective
buyers, entered into contracts to sell lots and build homes, and
took deposits ranging from $1,000 to $5,000 with the exception
of a few home buyers who deposited between $8,000 and $50,000.
After each deposit was received, it was deposited in either the
JAE payroll account or business account, and spent within a week
to cover both personal expenses and business expenses that were
not associated with the individual client’s home. Some deposits
were simply withdrawn as cash. During the time period covered by
the indictment, Ely and Zahrey accepted deposits totaling $226,768
from potential home buyers and did not place them into segregated
Sentencing is scheduled
for October 13, 2009 in the Circuit Court for Baltimore County.
This case was investigated by the Attorney
General’s Criminal Division with assistance from the Maryland
State Police and was originally referred by the Attorney General’s
Consumer Protection Division.