The former Chief Administrator for New Castle County (DE), Sherry Freebery is set to face charges that she defrauded defrauded Wells Fargo Home Mortgage by obtaining more than $1 million in loans for properties in Hockessin and Dewey Beach without informing the mortgage company that her liabilities included a $2.3 million note payable on demand to DuPont heiress Lisa Dean Moseley.

The trial is set to be heard in Philadelphia on January 9, 2006. The case was moved from Delaware because of defense concerns about pretrial publicity.

Update on Tuesday, January 17, 2006 at 09:02PM by The Editor - Ian Shuter

On January 15, 2006 the trial ended in a hung jury after a 10-2 verdict in favor of conviction. No date for a retrial has been set nor has the prosecution indicted if it will ask for a retrial.

See the reference section below for two further articles about the trial.

Attorney General Jane Brady announced that Bruce and Sandra Bennett of Selbyville, were arrested today and charged with Financial Exploitation of an Infirm Adult and Conspiracy for entering into a mortgage loan agreement with an infirm elder. The victim is an elderly woman who was a former resident of a Roxana rest care facility operated by Sandra Bennett’s daughter and son-in-law, Angelia and Douglas Gordon.

The Gordons pled guilty in October, 2004 to exploitation and theft charges against the same victim and were ordered to pay $151,000 in restitution to the victim. The State alleges that funds transferred to the elderly victim from the Bennett’s bank account to satisfy the Gordon’s restitution order have been unlawfully “loaned” back to the Bennett’s by the victim who is currently a ward of the Office of the Public Guardian.

The Attorney General’s Medicaid Fraud Control Unit (MFCU), with the assistance of the Delaware State Police, made the arrest this morning at the defendants’ home. The MFCU investigated the alleged financial exploitation of the victim.

This charge of Financial Exploitation of an Infirm Adult is a felony because the value of the property which was stolen exceeds $50,000. Defendants were both released on $75,000 secured bond. A no contact order with the victim is in place. A Preliminary Hearing has been set in the Court of Common Pleas in Georgetown on June 8, 2005 .

The Delaware News Journal  – April 23, 2005

Sean O’Sullivan reports in the Delaware News Journal that two men convicted of running a conspiracy to defraud homeowners, home buyers and several banks were each sentenced to five years in prison by a federal judge Friday. U.S. District Judge Gregory M. Sleet also ordered the men, Robert Kossak, 31, of Newark, and Anthony Panaro, 33, of Florida, to repay more than $660,000 to 68 victims.

Assistant U.S. Attorney Richard Andrews said the pair targeted the elderly, infirm and other vulnerable people, including a man in an oxygen tent and a blind woman. The pair, who operated Infinity Mortgage Inc., among other businesses, stole loan checks, forged signatures on loan documents and charged fees without telling borrowers between 1998 and 2001, prosecutors said.

The two were convicted by a jury in 2003 of 13 charges, including conspiracy, bank fraud and interstate transport of property obtained by fraud.

Kossak, in his appearance before Sleet on Friday, argued that he was a changed man. He asked to be spared a lengthy prison term so he could be with his new wife and baby daughter. Kossak’s rambling 45-minute speech included recollections of his father, regrets, his newfound faith and a brief flirtation with suicide.

Panaro attempted to plead ignorance, saying he did not understand what was going on and argued that many of the victims were satisfied with the service they were given. One victim, however, spoke in court to refute the two men. Valerie Prince said as a result of working with the two, she ended up losing her house. Her children were forced to go live with their father, she said.

According to Andrews, Prince’s income on loan documents was forged, allowing her to qualify for a loan she could not repay. Prince said she was quickly overwhelmed by the payments and had to declare bankruptcy and sell her home. In sentencing, Sleet said neither man appeared to have accepted responsibility for the actions nor recognized the harm they caused.

The two were immediately taken into custody to begin serving their sentence. Afterward, Prince said she was satisfied that the two are now paying a price for their crimes.

Delaware News Journal - February 19, 2005

Sean O’Sullivan reported on Delaware Online that a man who embezzled an estimated $1.4 million from Wilmington Trust offered no apologies and no explanation Friday as he was sentenced to five years and three months in jail. John Flowers, 58, dressed in a suit and with his wife and children in the courtroom, did not react to the sentence from U.S. District Judge Kent Jordan.

Flowers’ attorney, Edmund D. Lyons Jr., said he could offer the court no reason for his client’s behavior. There was no issue with gambling or addiction, he said. All the money apparently went to maintaining “the lifestyle of the Flowers family.” Assistant U.S. Attorney Ferris Wharton said that explanation seemed to be “a nice way of saying greed.” Flowers wanted more money and a better life but didn’t want to earn it, he said.

According to prosecutors, Flowers used his position as a vice president and mortgage loan originator to steal at least $9,000 nearly every month between 1991 and September 2003. Flowers did this by transferring money from an internal Wilmington Trust account into his own account while submitting false papers to cover his trail. No customer accounts were affected, Wharton said, and the scheme involved about 150 transactions over a dozen years. The thefts were discovered by the bank, which turned the case over to prosecutors.

While Flowers did sign over his pension account worth $242,000 to make restitution to the bank, he did not stop living his “lifestyle” after he was caught.

Although his bank accounts were frozen, Flowers sold a beach house to make $162,000, which he then used to pay off credit cards, car loans and student loans. He also continued to pay for private school for one of his children and spent $18,000 to $20,000 on a wedding for his daughter at Winterthur in August. Flowers told the judge he paid off loans because he “didn’t wish to place any additional punishment” on his family. He offered no explanation for the wedding.

Jordan told Flowers he was perplexed by his actions. “It just beats the life out of me what got into you,” he said, agreeing with Wharton that Flowers’ motive appeared to be greed. There were no addictions, no medical issues, not even childhood issues, he said. “There is nothing even to pity there.”

Jordan sentenced Flowers to 63 months and ordered him to make full restitution to the bank, but allowed him until March 10 to report to jail.

“I’ll note I’m demonstrating some trust,” Jordan said.

Afterward, Lyons said he could not argue with the sentence and said it was unlikely Flowers would ever be able to repay Wilmington Trust in full. He said Flowers’ spending habits before his sentencing likely added to his time in jail. “Apparently that was a trade-off he was willing to make,” he said.

Delaware Attorney General Press Release — December 15, 2004

(Wilmington, DE): Attorney General Jane Brady announced today that, following a six week trial, a jury in New Castle County Superior Court found Albert A. Vietri, Tina Marie Vietri, and Joseph L. Capano, II and two of the three companies they own, Wellington Homes, and 397 Properties, L.L.C., (hereinafter, Defendants) to be in violation of Delaware’s Consumer Fraud Act and the Uniform Deceptive Trade Practices Act. 

The jury could not reach a unanimous verdict as to two additional defendants, Joseph L. Capano and Christiana Ventures, Inc. but did find Christiana Ventures, Inc. in violation of the Uniform Deceptive Trade Practices Act.

The civil enforcement action, originally filed in September, 1999, alleged the defendants committed various acts of consumer fraud in connection with the advertising, sale and construction of residential homes in the Lea Eara Farms development near Middletown, DE. 

As a result of the jury’s verdict, a special restitution hearing will be scheduled to address the losses suffered by the affected homeowners. For violating the State’s consumer protection laws, penalties in the amount of $223,013 were assessed by the jury as follows:

Wellington Homes was found to have committed 12 willful violations of the Consumer Fraud Act and was assessed a civil penalty of $55,571

397 Properties, LLC was found to have committed 15 willful violations of the Consumer Fraud Act and was assessed a civil penalty of $46,030

Albert Vietri, a principal in 397 Properties, LLC, was found to have committed 15 willful violations of the Consumer Fraud Act and was assessed a civil penalty of $46,030

* Tina Vietri Meyers, a principal in Wellington Homes, was found to have committed 7 willful violations of the Consumer Fraud Act and was assessed a civil penalty of $18,793

Joseph L. Capano, II, a principal in Wellington Homes, was found to have committed 12 willful violations of the Consumer Fraud Act and was assessed a civil penalty of $56,589

These statutory penalties will be paid to the Delaware Consumer Protection Fund

Delaware State Police Press Release — May 28, 2004

Rehoboth Beach - Delaware State Police arrested a Rehoboth man yesterday who is accused of stealing $320,000 that was intended to pay off a mortgage . The incident occurred between January 2003 and May 2004. On January 31st, 2003, the suspect, acting as an attorney, handled a mortgage refinance for a 38-year-old victim. The victim was refinancing his mortgage that he had with Washington Mutual and was changing it to Wells Fargo.

On February 3rd, 2003, Wells Fargo sent the suspect a check in the amount of $320,000 to pay off the victim’s existing mortgage with Washington Mutual. The suspect then deposited the check into his own Wilmington Trust Real Estate account, which is not an escrow account that is required to deposit these types of money.

On May 18th, 2004, the victim attempted to obtain a consolidation loan and was advised that he had poor credit. The victim ran his credit report and found out that the Washington Mutual mortgage account had never been paid off and it was delinquent on several occasions. The victim also discovered that the address on the account had been changed to the suspect’s address.

Kurt J. Doelze, 51 , of Kings Creek Circle, was charged with theft over $100,000 and identity theft . Doelze was committed to the Sussex Correctional Institution in default of $305,000 cash bond.