The only criminal case against a real estate investor accused of running a Ponzi-style international investment scheme that affected thousands of homes in Baltimore and Philadelphia is underway this week in Baltimore District Court.
Jay Walsh, who ran ABC Capital until it filed for bankruptcy, looked on as a former client testified that he purchased a home in West Baltimore with the promise that $20,500 of his investment would be used to renovate the property.
“Did the defendant complete the services that he was contracted to?” asked Assistant State’s Attorney Samantha Danzinger.
“No,” replied the investor, Fernando Iacomacci, an engineer who works in Colombia and Venezuela.
The case began late Monday after technical delays related to Spanish interpretation services and will resume Thursday afternoon.
ABC Capital sold more than 1,000 homes in distressed areas of Baltimore to far-flung investors with the promise of fixing them up and generating guaranteed income. In dozens of civil lawsuits, Walsh has been accused of not following through on promised repairs, leaving his investors — many of them in foreign countries — grasping for help and causing city neighborhoods to fall into further disrepair.
The case was brought in March by the Maryland Home Improvement Commission, a consumer protection agency within the Maryland Department of Labor. Iacomacci also has a pending lawsuit against Walsh and Castle Title, the now-defunct title company that facilitated the transaction and is under investigation by the Maryland Insurance Administration.
In a brief opening statement, Walsh’s attorney, Kevin Carr, described the proceeding as “a civil case that involves ongoing litigation between two corporations, and is being brought in a criminal context in a backdoor way to come after my client.”
Danzinger, the prosecutor, said Walsh entered into an agreement representing that he was licensed as a contractor when he was not. The statement of charges says Walsh did not have a valid Maryland home improvement license prior to acting in the capacity of a home improvement contractor, and engaged in home improvement business as a salesperson without obtaining a home improvement salesperson license.
The charges include felony theft and three misdemeanors.
The defense in its questions appeared to be laying the groundwork that Walsh was not directly involved in the transaction with Iacomacci. With many of his clients being located in foreign countries and not being English speakers, Walsh indeed used a network of others to recruit and interact with them. The investment was billed as hands-off, with Walsh taking care of every step.
Iacomacci said he dealt with a Florida Realtor Alejandro Tabosky, but that he knew that Tabosky was a go-between for Walsh. Walsh’s signature appeared on contract documents as the authorized person for ABC Capital, prosecutors noted.
When Carr attempted to object to Iacomacci’s testifying about what Tabosky told him, citing hearsay, District Judge Kent Boles Jr. asked if he was sure. With Iacomacci’s comment about Tabosky’s involvement, “you might get what you want,” Boles, who will render a verdict, told him.
ABC filed for Chapter 7 bankruptcy protection in December 2022 amid the mounting lawsuits and complaints.
The Pennsylvania Attorney General’s Office said Walsh engaged in unfair or deceptive trade practices but reached a deal with Walsh in April that allowed him to avoid paying fines or admitting wrongdoing.
He and the company were barred from running a property management company in Pennsylvania for 25 years, but are permitted to operate rental units there using third-party property managers. ABC also agreed to a $350,000 suspended fine — meaning it won’t have to pay as long as it complies with the deal.
