Marilyn Mosby case: Attorneys preview evidence in former Baltimore state’s attorney’s mortgage fraud trial

In 2020, around the time she was completing a mortgage application for a vacation house in Florida, Baltimore State’s Attorney Marilyn Mosby did something she hadn’t done for years: She filed a tax return separate from her husband.

When the Internal Revenue Service processed Mosby’s return, the federal agency notified her that it was taking the money she was due and allocating it toward the tax debt she and her husband had accrued, an IRS officer said in court Monday.

In his opening statement, Assistant U.S. Attorney Sean Delaney said that piece of evidence proves Mosby knew she was delinquent on federal taxes and that she knowingly lied on loan applications for two Florida properties: an eight-bedroom house near Disney World and a condo on the Gulf Coast.

Mosby, 44, is on trial for two counts of mortgage fraud, with the government having accused her of making several false statements on loan applications for the Florida homes, including that she neglected to disclose her tax debts on applications for both properties.

“The defendant, a lawyer and a public servant, Baltimore’s top prosecutor, lied repeatedly,” Delaney told jurors.

To prove the charges, prosecutors have to convince the jury that Mosby made false statements knowingly and that those lies were intended to influence mortgage lenders.

Her defense attorneys disagree that she did it knowingly.

“The information she provided in the loan process was submitted in good faith. It was submitted without criminal intent. She committed no crime. Marilyn Mosby is innocent,” Assistant Federal Public Defender Sedira Banan told the jury.

Banan said Mosby trusted her now ex-husband, Baltimore City Council President Nick Mosby, to take care of the couple’s taxes. Then, she relied on professionals to help her navigate a complicated real estate process foreign to her.

“Despite her professional rise to prominence, her name was not even on the deed of the house she and Nick Mosby shared,” Banan said. “People’s life stories are more complex than a job title, a salary, a degree.”

Banan encouraged jurors to look beyond the financial documents on which the government will base its prosecution.

“The key to this case is understanding the interplay of trust, human relationships, context and trying to do your best to navigate an unfamiliar world,” Banan said.

Along with prosecutors, the defense lawyers chose a panel of 12 jurors and four alternates last week to decide Mosby’s case. Composed of men and women from different walks of life, the panel includes a retired teacher and a property manager, a sales representative and a career tradesman.

A separate jury in November found Mosby guilty of two counts of perjury, determining she lied about suffering coronavirus-related financial hardship to withdraw tens of thousands of dollars from her city retirement fund.

Mosby used the $80,000 she obtained under the federal CARES Act, Congress’ first pandemic relief package, toward down payments for the pair of Florida properties. Without the retirement fund withdrawals, she couldn’t have afforded them, an FBI accountant testified at Mosby’s perjury trial.

Jurors at Mosby’s first trial heard evidence of how the former state’s attorney obtained the money and how she spent it. But they were tasked with judging only the former.

This jury’s work will focus on Mosby’s real estate transactions, with jurors likely to be presented dense mortgage documents and detailed analysis of her finances before they’re asked to make a decision.

Jurors also are expected to hear from a range of witnesses, including IRS and FBI agents, a forensic accountant, and mortgage brokers and bank lenders.

Also on the potential witness list are Mosby herself and Nick Mosby.

Mosby chose not to testify at her perjury trial, and legal experts say she has an even more daunting decision to make at this trial.

Take the witness stand, and Mosby must acknowledge she’s guilty of lying under oath. Reference to her conviction won’t be allowed at trial unless she testifies. At the same time, Mosby’s testimony could be the clearest way for her to explain her side of the story.

Her defense lawyers seem poised to rely in part on Nick Mosby to support their defense that Mosby didn’t know she was lying.

Mosby neglected to disclose her and Nick Mosby’s $69,000 federal tax debt in both mortgage applications. Pretrial papers filed by Mosby’s lawyers suggest they intend to elicit testimony from Nick Mosby that he was responsible for the couple’s taxes and may not have communicated clearly to his ex-wife about their problems.

IRS officer Matthew Lopes went over the former power couple’s tax returns year by year during several hours of testimony Monday. Lopes said the tax agency sent the Mosbys notice by certified mail 40 times informing them of their tax debt and, later, the lien it placed against their assets.

During cross-examination by Mosby’s lawyers, Lopes acknowledged that the mailing status of several notice letters was unclear based on IRS records. Some, however, were marked “delivered and signed.”

About a week before Mosby closed on the house near Disney World, she entered into an agreement with a company to run it as a rental. The contract gave the business, Executive Villas Florida, control of the property even though Mosby signed a document in her mortgage certifying she would “maintain exclusive control” over the property.

The so-called “second home rider” allowed Mosby to secure a lower interest rate on the mortgage.

Andrew Booth, the president of Executive Villas, took the witness stand Monday afternoon. During his testimony, jurors got to see emails between Mosby and Booth as well as other employees of the property management and vacation rental company.

Though the company sent Mosby a presentation saying it believed in an “old school” business style and “doesn’t believe in contracts,” it apparently entered a contract with Mosby. Booth testified the contract gave his company 15% commission on any rental it booked, while it wouldn’t take any money from a rental Mosby secured herself or via another listing service like Airbnb.

With their questions, Mosby’s lawyers sought to delegitimize the contract and show that Mosby had the ultimate say over her property. For example, Booth testified that the company had to get Mosby’s permission to make repairs on the house.

Executive Villas terminated the contract in August 2021 because, Booth said, “Mosby was impossible to deal with. She was a nightmare.”

Delaney, the prosecutor, said the government had four more witnesses — three mortgage lenders and a forensic accountant with the FBI — and could conclude its case by the end of the day Tuesday.

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