Owners of Baltimore County Home Construction Company Sentenced to Jail for Failing to Properly Handle New Home Deposits

BALTIMORE, MD ( November 20, 2009) - Attorney General Douglas F. Gansler announced today that Walter Osborne Ely, Jr., 46, of Baltimore, and his sister and business partner Kimberly Zahrey, 44, of Owings Mills, were each sentenced to eight years of incarceration, with five years suspended, in Baltimore County Circuit Court. Judge Vicki Ballou-Watts also ordered that upon release, Ely and Zahrey must serve five years of supervised probation and pay a total of $188,768 in restitution to 19 victims.

In June, Ely and Zahrey each pled guilty to six felony counts of Failure to Hold New Homes Sums in Escrow. Beginning in 2002, Ely and Zahrey, doing business as JAE Developers, advertised new home construction at three different sites in Baltimore County. They entered into contracts to sell lots and build homes and took deposits that were deposited in either the JAE payroll account or business account and not a segregated and protected escrow account. Deposits were then spent within a week to cover both personal expenses and business expenses that were not associated with the individual client’s home.

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. In making his announcement today, Attorney General Gansler thanked Assistant Attorney General Megan Limarzi and Investigative Auditor Mike McGraw for their work on the case.