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$660,923 construction contract. The loan application listed
monthly income of $13,750, assets of $819,293.65, and a net worth
of $555,325.65.
As part of the loan application process, petitioners were
required to submit their Federal income tax returns for 1986 and
1987. The returns that were hand delivered to Ms. Gerling by either
Mr. or Mrs. Zaban reported gross income before adjustments of
$160,115 for 1986 and $165,263 for 1987, even though the returns
prepared and filed with the Internal Revenue Service (IRS) reported
gross income before adjustments of $66,195 for 1986 and $101,963
for 1987. Mr. Zaban prepared the fraudulent returns submitted to
Midstate for the purpose of persuading the savings and loan to
approve the loan applications. These fraudulent returns were the
basis for the bank fraud charge to which Mr. Zaban pled guilty.
Petitioners completed construction of the Lutherville,
Maryland, home and began occupying it in or about June 1989. The
design of the home was the subject of an article in the Baltimore
Sun in October 1990.
C. Cash Found in Safe Deposit Boxes
In March 1990, a search warrant was executed by the Baltimore
County Police Department at the Mercantile Safe Deposit & Trust
Company, and three safe deposit boxes were searched. Box 3631,
held in petitioners' names, contained a photo album which was not
seized. Box 3567, held in the names of Mr. Zaban and Loretta
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