Associated Press//December 15, 2011
//December 15, 2011
McLEAN, Va. — Three Maryland men have been indicted in an alleged conspiracy to steal nearly $10 million from a Vienna, Va.–based company’s employee pension plan through a series of bad mortgage loans.
Robert Fulton Rood IV, 44, of Potomac, Nikolaos Hepler, 31, of Gaithersburg and Lloyd Mallory Jr., 49, of Silver Spring were charged in a 16-count indictment unsealed Thursday with wire fraud and other offenses.
The indictment alleges that Rood led a scheme to defraud Southern Management Corporation Retirement Trust, which funds pensions for Southern Management Corp., a prominent property management firm in the mid-Atlantic region with 1,200 employees.
Specifically, the indictment says that in 2006, Rood persuaded SMC’s president and CEO, David Hillman, to allow him to put together loan packages that SMC’s retirement fund could invest in. Rood eventually brokered a series of 32 mortgage loans that he sold to the retirement trust in 2006 and 2007. All but eight of loans went into default, but Rood hid that fact from the retirement trust, according to the charges.
The indictment also alleges that Hepler, Rood’s employee, misrepresented information about the loans, and that Mallory, an accountant, issued a false report about the loans.
Court documents indicate that SMC’s retirement trust has in excess of $30 million in assets. An SMC spokeswoman did not return a call seeking comment.
Mallory already received a five-year prison term in a separate mortgage fraud case, one of many that has been prosecuted by the Eastern District of Virginia in recent years in the wake of the housing market’s collapse.
Rood’s attorney did not return a call seeking comment. At an initial appearance Thursday, prosecutors sought Rood’s detention pending trial. He is being held pending a detention hearing scheduled for Tuesday.
Hepler was released pending trial following his initial appearance.t