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For Immediate Release

Media Contact:
Raquel Guillory, 410-576-6357

Owners of Baltimore County Home Construction Company Plead Guilty to Failing to Properly Handle New Home Deposits

BALTIMORE, 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 Some deposits were simply withdrawn as cash.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 escrow accounts.

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.


Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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