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Marilyn Mosby, former Baltimore state’s attorney, guilty on one count of mortgage fraud, acquitted on another

A federal jury convicted former Baltimore State’s Attorney Marilyn Mosby of one count of mortgage fraud, finding she gave a false statement on a loan application to buy one of her vacation homes in Florida, but ruling she was not guilty of a second count of mortgage fraud.

The verdict at the U.S. District Courthouse in Greenbelt came about three months after another federal jury convicted her of perjury in November for saying she suffered financial hardship because of the coronavirus pandemic, allowing her to withdraw $80,000 from her city retirement fund.

She used the money to close on the two Florida properties, worth almost $1 million combined: an eight-bedroom house near Disney World and a beachside condo on the Gulf Coast.

As the courtroom deputy read the “not guilty” verdict on the first count, Mosby, 44, lowered her head and let out a sob. She sobbed louder when the “guilty” verdict on the second count was read.

While much of the trial focused on Mosby’s failure to disclose a federal tax debt that with penalties and interest had grown to $69,000, the guilty verdict was for a “gift letter” she composed saying that her then-husband Nick Mosby gave her enough money to close on the condo in Longboat Key, Florida.

Mosby was about $5,000 short on closing because the mortgage lender wouldn’t accept an earnest money deposit from an account she shared with her daughter. She needed to find $5,000, or convince the lender that she could come up with it at closing, quickly.

One of the loan underwriters testified that his company already had locked in an interest rate for Mosby at that time. If Mosby didn’t close, the underwriter said, “that rate lock was set to expire.”

Her mortgage broker, Gilbert Bennett, had another solution. He downloaded a template for a “gift letter” from the lending company’s website, filled it out partially and told Mosby to take it from there.

Nick Mosby, president of the Baltimore City Council, testified that he pledged to give Mosby $5,000 at close.

But, as the forensic accountant testified, he didn’t have that much money in his account. Marilyn Mosby waited until she received her next paycheck and transferred $5,000 to her then-husband. Nick Mosby transferred the money from his checking account to his savings account and back again.

Then, he wired it to an escrow agent for closing. The FBI accountant said the transaction was the only time Marilyn Mosby transferred money to her husband in the five years of the couple’s financial records that were reviewed.

Under cross-examination by Assistant United States Attorney Aaron Zelinsky, Mosby said she was not confident her husband had enough funds, so she transferred $5,000 to him just to be safe. When he sent her $5,000, she said she wasn’t sure if it was what she had transferred to him or if it was from his own funds.

After the verdict was read, Mosby met with supporters in the courthouse hallway, hugging and thanking them but looking despondent. They then gathered in a prayer circle in the lobby.

She did not comment to reporters as she left the courthouse surrounded by supporters chanting: “We love Marilyn.”

Gwen Levi, a Mosby supporter who placed her face in her hands in the courtroom after the verdict was read, called the ruling “a compromise” and said Mosby should have been found not guilty on all counts.

“I represent a lot of returning citizens, and we do support her,” Levi said. “Her policies as state’s attorney were fair and equitable and many of us support her because of that.”

Mosby’s defense team from the Federal Public Defender’s Office also left without commenting.

Prosecutors did not comment, but Maryland U.S. Attorney Erek L. Barron praised their work on the case in a Tuesday news release.

“We humbly respect the court’s considered rulings, opposing counsels’ zealous advocacy, and the wisdom of both jury verdicts in this case and we remain focused on our mission to uphold the rule of law,” Barron said in the release.

Mosby faces a maximum of 30 years at sentencing, according to the U.S. Attorney’s Office. While experts say she won’t receive a punishment anywhere near the maximum, separate federal convictions stemming from two trials makes it much more likely that Mosby, a mother of two, will be incarcerated for some amount of time.

The verdict came after a day of deliberations with no official word from the jurors. In early afternoon there was a flurry of activity and speculation the jury might have a question.

Marilyn Mosby arrived at the courthouse shortly before 2:30 p.m. but seemed to spend the rest of the afternoon in the public defender’s office or in the lobby with supporters. A docket entry noted a telephone conference with the judge but without details of what was discussed.

It is a stunning fall from grace for Mosby, once heralded as a pioneering progressive prosecutor and thrust into the national spotlight in 2015 after she charged officers involved in the death of Freddie Gray from injuries sustained in police custody. She had been one half of a political power couple, married until November to Nick Mosby. The trial exposed financial problems, despite her making about $250,000 a year at the time she bought the houses, and ultimately a marital breakdown.

While not charged in the case himself, Nick Mosby could face fallout from revelations during the trial, including that he was in such financial straits at one point that he got behind on the mortgage, his car was repossessed and his wages were garnished because of unpaid student loans. He is running for re-election as council president, a role that includes overseeing the annual city budget process and presiding over the Board of Estimates, the city spending panel.

Government prosecutors had cast doubt that Marilyn Mosby, a lawyer who managed a large prosecutors office, was so lax about signing official documents. They said she trusted but failed to verify what she was told by her then-husband and those helping her through the real estate and mortgage process.

To secure a conviction, prosecutors needed to prove that Mosby knowingly made false statements and that her lies influenced the financial institutions that loaned her money. While they listed seven false statements on her indictment, they only needed to convince jurors of one false statement per mortgage for each charge.

Loan underwriters testified their companies relied on the information in Mosby’s applications in deciding to lend her money. Had they known she withheld information or misled them, they said, they might not have issued loans.

“We need to know all liabilities to make sure a borrower can afford a mortgage,” an underwriter said in court. “We are evaluating risk. If there’s debt, we want to know about it. We take this into consideration when approving or denying a mortgage loan.”

Mosby’s lawyers maintained she did not intentionally lie on the applications. Just like she trusted her former husband to take care of the couple’s taxes, they said, she relied on experts to guide her through a real estate world unfamiliar to her.

Mosby took the stand in her own defense, after remaining silent during the perjury trial.

“I regret not testifying before,” she said, “and I want the jury to hear my truth.”