Baltimore exec pleads guilty to massive fraud

BALTIMORE (AP) - A Cockeysville man pleaded guilty yesterday in federal court to duping a Georgia computer services company into spending $32 million on nonexistent computer servers and software before leasing them back to him.

Fabian, who then worked for an equipment leasing broker, used false invoices and wire transfer receipts to trick Norcross, Ga.-based Solarcom Inc. into believing he had purchased millions in computer equipment and software, according to a statement of facts. Then he would sell those nonexistent products to Solarcom and lease them back.

"After his $32 million scheme was caught in 2004, Mr. Fabian launched another scheme that netted $7.5 million," U.S. Attorney Rod Rosenstein said in a statement. "Fraud by corporate executives jeopardizes public confidence in our economy."

In August 2007, Mr. Rosenstein called it one of the largest monetary theft cases ever prosecuted in Maryland. He said it was exceeded only by the Allfirst case, in which rogue trader John M. Rusnak defrauded the bank of nearly $700 million.

Fabian also admitted that, between 2005 and 2007, he deceived two banks and an invoice discounting company into providing $7.5 million in financing to entities he controlled.

The scheme came to light last summer when two of the banks who lent Fabian millions demanded payment on the credit lines and loans. He was indicted in August on 26 charges. The rest have been dropped.

"This is a massive fraud to which your client has pled guilty," U.S. District Court Judge Richard Bennett said yesterday.

Fabian's public defender James Wyda disputed the amount of money lost, claiming Fabian's fraud amounts to between $7 million and $20 million.

But federal prosecutors contend the amount is more than $20 million. Fabian used the money he made from the scheme to buy his home in Cockeysville, several beachfront properties in North Carolina, a Silverton yacht, three cars and several companies.

Fabian faces up to 30 years in federal prison at sentencing, which was scheduled for Sept. 22. He may also be ordered to pay restitution.