BALTIMORE—Brian McCloskey, age 44, of
Baltimore, Maryland, pleaded guilty today to conspiring to commit wire fraud
arising from an investment fraud scheme.
The plea agreement was announced by
United States Attorney for the District of Maryland Rod J. Rosenstein; Special
Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and
Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue
Service-Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement,
McCloskey was a home builder and the registered agent and owner of several
Maryland corporations, including, The McCloskey Group, LLC, 1100 Columbia York
PA LLC, Claires Lane, LLC, and Kellen Property & Investment LLC. From at
least August 2009 to August 2011, McCloskey and a co-conspirator also in the
home building business, targeted individuals seeking investment opportunities
or commercial real estate development lending, including a Bowie, Maryland
hotel project. Victim investors were instructed that in order to obtain loans
for commercial real estate projects, and in exchange for a high rate of return,
the purported lenders required that large sums of money be deposited in an
escrow bank account to show “liquidity,” and that co-conspirator Kevin Sniffen
was the only attorney assigned as escrow agent.
McCloskey admitted that he, Sniffen, and
their co-conspirators defrauded investors by fraudulently removing the escrowed
funds. Typically within one or two weeks after the deposit by the investor, McCloskey,
Sniffen, and their co-conspirators withdrew the victim’s funds from the escrow
accounts to pay the co-conspirators’ business and personal debts or to make
“lulling” payments to other victim investors.
McCloskey, Sniffen, and their
co-conspirators attempted to cover up the fraud by: issuing false verifications
of deposits and false bank statements regarding the amount of escrowed funds;
falsely representing in e-mails and by phone the balance of escrow funds and
the date when the investors’ money would be returned; and returning part of the
victim’s investment using funds fraudulently obtained from other investors.
McCloskey and his co-conspirators
improperly obtained funds from investor victims in excess of $14 million.
McCloskey faces a maximum sentence of 20
years in prison and a fine of $250,000 or twice the value of the gain or loss.
U.S. District Judge James K. Bredar scheduled sentencing for August 21, 2012,
at 10:00 a.m.
Kevin Sniffen, age 50, of Phoenix,
Maryland, an attorney licensed in Maryland, pleaded guilty to the same charge
and is scheduled to be sentencing on June 4, 2012 at 2:00 p.m.
This law enforcement action is part of
President Barack Obama’s Financial Fraud Enforcement Task Force. President
Obama established the interagency Financial Fraud Enforcement Task Force to
wage an aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes representatives from a
broad range of federal agencies, regulatory authorities, inspectors general,
and state and local law enforcement who, working together, bring to bear a
powerful array of criminal and civil enforcement resources. The task force is
working to improve efforts across the federal executive branch, and with state
and local partners, to investigate and prosecute significant financial crimes,
ensure just and effective punishment for those who perpetrate financial crimes,
combat discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein
thanked the FBI and IRS-CI for their work in the investigation. Mr. Rosenstein
praised Assistant U.S. Attorneys Sean O’Connell and Sujit Raman, who are
prosecuting the case.
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