Lawyers for Marilyn Mosby rested their case in her defense of federal mortgage fraud charges Thursday following testimony from the former Baltimore state’s attorney.
Mosby, facing pointed questions from prosecutors, said she read the mortgage applications she submitted for two homes in Florida, but didn’t actually fill them out herself.
Going document by document, Assistant U.S. Attorney Aaron Zelinsky pressed Mosby about why the applications did not disclose a $69,000 federal tax debt she shared with her husband.
Mosby said her mortgage broker input most of the information in the applications, and that she only reviewed them for accuracy.
“I thought it was accurate. I thought it was complete,” Mosby said in court. “It does not mean that I did anything intentional when signing off, or commit any sort of perjurious act.”
The tax debt, not included on either loan application, is included among seven false statements prosecutors accused Mosby of making on mortgages for an eight-bedroom house near Disney World and a condo on Florida’s Gulf Coast.
Mosby, 44, faces two counts of mortgage fraud, felonies that carry a maximum penalty of 30 years in prison per charge. In addition to neglecting to disclose the tax debt, Mosby allegedly misled mortgage lenders in several other instances, according to the indictment against her.
On Wednesday, Mosby testified about flying to Florida in September 2020 for a momentous occasion in her life — buying her first home. It was, she said, an opportunity to develop financial independence in her faltering marriage and make memories with her daughters a few miles away from Disney World, where the couple had taken their daughters every other Christmas.
Mosby testified she didn’t read every piece of paper in the “great pile of documents” in front of her at the closing. She said she didn’t even remember seeing a so-called second home rider.
But Mosby had signed it, certifying that she would “maintain exclusive control” over the eight-bedroom house, despite having ratified a contract with a company to operate her property as a rental.
That’s one of the false statements listed in her indictment relating to the Disney-area house. There’s also the tax debt.
“I did know we had an outstanding tax liability in 2020 when I signed the mortgage application,” Mosby said in response to one of Zelinsky’s questions.
She later qualified that admission by saying she didn’t think she had to list the tax debt because she believed at the time that her husband was paying off the debt through an installment agreement with the Internal Revenue Service.
Nick Mosby had pursued an installment agreement, but the arrangement fell through. He testified he misled his wife to believe he was taking care of the debt.
“I lied to her throughout the whole time,” the council president said in court.
His testimony was critical to the defense’s theory that Mosby didn’t intentionally lie on the application, and instead was misguided by people she trusted.
The prosecution has to prove Mosby made the false statements knowingly and that her lies influenced the financial institutions that loaned her money. Although her indictment lists seven false statements across two loan applications, prosecutors need only convince the jury of one lie per mortgage to secure a conviction on each count.
As part of the government’s case, mortgage underwriters testified their companies relied on the information in Mosby’s applications in deciding to loan her money. Had they known she either withheld information or misled them, the underwriters said, they may not have issued her loans.
Months after Mosby bought the property near Disney World, she learned of an opportunity to purchase a condo in a quaint complex next to the Gulf of Mexico. She testified she was leery at first, given that she had just purchased a home for about $500,000, but decided to pursue the condo because short-term rentals were mostly paying for the eight-bedroom house.
She closed on the condo in February 2021. According to her indictment, she again neglected to disclose the tax debt on that loan application.
The previous fall, Mosby testified, she learned from a Baltimore Sun reporter that the IRS had placed a lien against the home she shared with Nick Mosby. Livid, she said, she confronted her husband.
Nick Mosby testified that he promised her he would take care of the debt immediately. Marilyn Mosby said she heard him on the phone with a Baltimore bank discussing a loan to pay off the lien. But Nick Mosby didn’t take care of the debt immediately.
When Zelinsky asked why she didn’t disclose the debt, Mosby said she believed they were no longer delinquent and blamed her mortgage brokerage for any errors on the applications.
“Again, I didn’t populate anything” on the application, Mosby said. “My Easy Mortgage populated it. No, no one told me that tax debt didn’t need to be populated by them.”
Prosecutors confronted Mosby with correspondence pertaining to an investigation into her by Maryland’s Bar Counsel, which looks into attorney misconduct. In November 2020, bar counsel investigators asked Mosby’s attorney to provide them with tax records, including any evidence of payments or attempts to pay her tax debt.
Through her attorney, Mosby provided no such evidence. She testified Thursday she didn’t review documents her attorney attached to a letter responding to the probe in January 2021 — about a month before she closed on the condo.
Mosby’s mortgage broker, Gilbert Bennett, suggested she write a letter about her intentions for the condo to submit to the lender. He said Mosby should write she had lived in Florida for about 40 days, among other suggestions.
In the final letter, Mosby wrote that she’d been living at the house near Disney for the last 70 days. An FBI accountant who reviewed her travel and bank records said Mosby had only been in Florida for about half as long as she claimed.
“It was an approximation of the time I spent there,” Mosby testified. “In my mind, as was told to me by my mortgage broker, all I needed to do was spend one day to qualify for a second home mortgage.”
Mosby acknowledged during her testimony having been found guilty of two counts of perjury in November.
U.S. District Judge Lydia Kay Griggsby had ruled before trial that prosecutors could ask her about the conviction to undermine her credibility, but not about the details of the perjury case. But when Federal Public Defender James Wyda asked Mosby Wednesday why she chose to testify, she went outside of the scope Griggsby identified before trial.
“I regret not testifying before,” Mosby said, “anGetty Images…d I want the jury to hear my truth.”
Prosecutors argued that Mosby, with her answer, planted doubts in this jury’s mind that she received a fair shake at the last trial.
After lengthy legal debate and negotiations between the attorneys, Griggsby agreed, allowing prosecutors to ask limited questions about the perjury case.
With its verdict, the jury in November determined Mosby lied about suffering financial hardship because of the coronavirus to withdraw $80,000 from her city retirement fund under a provision of a federal pandemic relief law. She used the money to purchase the homes
On Thursday, Griggsby expressed impatience at a trial that has proceeded more laboriously than expected. Jurors had been told to expect a three-week trial, but Thursday marked the end of that span, with sessions not held on Friday.
Griggsby told the lawyers they were belaboring issues and going over already-covered ground.
Zelinsky said he too was worried about the effect of jurors being held “hostage” beyond the expected number of weeks.
“We’re going to lose our jury,” he said.
Proceedings have bogged down in repeated sidebar discussions between the judge and attorneys, held via headset and under white noise, over what Mosby and other witnesses can or can’t be asked.
Under questioning by her attorney Wyda, Mosby said testifying has been “extremely hard” on her and her two daughters.
Spectators have grown over the week as first her ex-husband, Baltimore City Council President Nick Mosby, testified, and then Marilyn Mosby herself took the stand.
During the morning session, she displayed some feistiness, lapsing at times into her previous role as a prosecutor rather than her current role as witness and defendant. At one point, she stared directly at Zelinsky after he had asked her a question and said, “Is that your testimony, sir?” A couple of times, after Zelinsky repeated a question she hadn’t answered directly, she batted back.
“Asked and answered, yes.”
