Maryland Legal Briefs: June 22, 2009

Daily Record, The (Baltimore), Jun 22, 2009

City readies reverse-redlining case

The city of Baltimore has buttressed its "reverse redlining" lawsuit against Wells Fargo ahead of a critical hearing next week.

The city has sworn statements from its top code enforcement lawyer and from a former mortgage broker who arranged subprime home loans in Baltimore on behalf of the San Francisco-based megabank.

Chief U.S. District Judge Benson E. Legg this month rejected Baltimore's request to cancel the June 29 hearing -- the fourth so far to determine if the city's first-of-its-kind claim should proceed to discovery -- but lawyers for the city have persisted in offering what they say is more evidence of wrongdoing by Wells Fargo and more proof of the resulting harm to the city.

In his declaration, the city housing official claims his office has detailed records of the work Baltimore has been forced to do on vacant properties, ranging from $232 for a cleaning to as much as $70,000 for a demolition. The former Allied Home Mortgage Capital Corp. loan officer testified he is not aware of any other lenders who targeted Baltimore's black population as Wells Fargo did.

The Fair Housing Act lawsuit, which attracted national attention when it was filed in January 2008, seeks tens of millions of dollars to compensate the city for code maintenance, police and fire department costs and lost tax revenue it alleges is traceable to Wells Fargo's targeting of and then foreclosing upon Baltimore's minority population.

Brendan Kearney

Court will hear alimony appeal

The Court of Appeals agreed this month to hear a case challenging a judge's use of guidelines to help determine an alimony award.

Thomas Boemio challenges a Montgomery County Circuit Court judge's use of guidelines put out by the American Academy of Matrimonial Lawyers to calculate Boemio's $3,000 per month alimony payment to his ex-wife, Cynthia Seixas. Judges often use such guidelines to inform their decisions on alimony and child support, even though they are not part of state law.

Boemio lost his case in the Court of Special Appeals. The court said the judge had stated outright that the guidelines were "not authoritative" and had actually rejected the guidelines' proposed award as too high.

Stephen Krohn, president of AAML's Maryland chapter, said it would be a positive development for the Court of Appeals to hold that judges may consider alimony guidelines. Without guidelines, alimony awards are "left up to scientific guesswork based on experience and the jurisdiction that you're in," he said.

"Since there are no [statutory amounts] for alimony at all, having the court say that we can use them as guidelines, not mandatory, I think would be a great thing," Krohn added.

Caryn Tamber

Prosecutors amend Nick's complaint

Federal prosecutors have amended their forfeiture complaint against properties and bank accounts seized during an investigation into an alleged $18 million illegal video slot-machine gambling enterprise run by John Zorzit, the owner of Nick's Amusements Inc.

The move comes about two weeks after U.S. District Judge Andre M. Davis granted Zorzit's motions to dismiss the complaint without prejudice because it failed to allege that Nick's had acquired the property with profits from an illegal gambling enterprise. The amended verified complaint makes that allegation.

In January, federal prosecutors moved to seize 17 Maryland properties and 14 bank accounts, which included Zorzit's $1 million home and the $780,000 Baltimore office of Nick's Amusements and Norino Properties LLC, another company he owns.

Barbara Grzincic

Grand jury indicts pharmacist for drug fraud

A federal grand jury has indicted a Howard County pharmacist on 12 counts of prescription-drug fraud and one count of aggravated identity theft.

Prosecutors allege Pamela Arrey, who operated a Medicine Shoppe franchise on both Liberty and Reisterstown roads in Baltimore, successfully sought reimbursement from health care benefit programs, such as Medicare, Medicaid and Express Scripts, for drug refills authorized by doctors but never requested by patients. Thursday's indictment contains different allegations than the charges leveled against Arrey, 48, last July, when she was accused of falsifying expiration dates on drug containers and making other label alterations.

Each of the current fraud counts carries a maximum of 10 years in prison, and the identity-theft count carries a mandatory minimum two- year sentence. The government also seeks forfeiture of Arrey's proceeds from the alleged scheme -- approximately $350,000 -- and her Glenelg home.

Brendan Kearney

Court strikes $25,000 verdict

The Court of Special Appeals has overturned a $25,000 verdict for a woman who injured her knee on a Metrobus in Prince George's County, saying the trial judge should have overturned the jury's decision as unsupported by the evidence.

Donna Djan claimed she had just paid her fare and was walking toward a seat when the bus driver negligently "took off pretty fast." As a result, Djan's left knee hit a seat, causing injury, she stated in her lawsuit against the Washington Metropolitan Area Transit Authority. The Prince George's County Circuit Court jury agreed with Djan, awarding her $25,714.40.