OCEAN CITY – An Ocean City couple was arrested this week on a nine-count federal indictment including charges of bank fraud, conspiracy to commit bank fraud, identity theft and others alleging an eight-year pattern of utilizing credit accounts of deceased relatives to purchase vacations, luxury goods and services and furnishings for their two resort homes totaling thousands of dollars.
U.S. District Attorney for Maryland Rod J. Rosenstein on Tuesday announced Ocean City resident Joel Swartz, 65, a practicing pharmacist in the resort, and his wife Esther Swartz, 62, a real estate agent with Coldwell Banker Residential Brokerage, were arrested after a federal indictment returned on Jan. 27 was unsealed on Tuesday. The nine-count indictment includes charges of bank fraud, conspiracy to commit bank fraud, access device fraud and aggravated identity theft.
According to the indictment, from July 2000 to December 2008, Joel and Esther Swartz used credit accounts of two dead relatives to obtain unauthorized extensions of credit from banks and other financial institutions for their personal use. The defendants did not inform the banks and financial institutions that the account holders, referred to in the indictment as MS and AS, had died. According to the indictment, MS and AS were relatives of the defendants who died prior to July 2005.
“It was further part of the scheme and artifice to defraud that defendants Joel and Esther Swartz accessed the existing credit accounts in the name MS and AS by cashing convenience checks on the accounts and by using credit cards to purchase goods and services for their own use and enjoyment including air travel, vacations, spa treatments and renovations and furnishings for their two residences in Ocean City without disclosing to the banks and other financial institutions from which they obtained these extensions of credit that putative account holders, AS and MS, were already dead,” the indictment reads.
Joel Swartz has been a licensed pharmacist in Maryland since 1968 and, for years, was the pharmacist at the Rite Aid in the Gold Coast Mall, although it is uncertain where he was practicing at the time of his arrest this week. His wife, Esther Swartz, is currently listed as a Realtor with Coldwell Banker Residential Brokerage and maintains an active practice.
Reached yesterday, Joel Swartz said there are two sides to every story and that he looked forward to the time when he could explain the charges alleged in the indictment.
“Obviously, things aren’t always the way they appear,” he said. “There are certain things I’m not allowed to talk about, at least not yet, but I remain hopeful we’ll get the chance to explain what these charges allege.”
According to the 13-page indictment, the defendants allegedly accessed their deceased relatives’ credit accounts by cashing convenience checks and using credit cards to purchase goods and services for their own use over an eight-year period from 2000 to 2008. While the indictment does not list a total dollar amount for the alleged scheme, it does include several examples under each count that suggest the final total is in the thousands of dollars.
In one example listed in the indictment, from Feb. 3-15, 2004, the Swartz’s used a Fleet Bank credit card issued to MS to pay over $2,600 for accommodations at the Newport Beachside Hotel and Resort in Sunny Isles Beach, Fla. In another example, they used a Bank of America credit card issued in the identity of MS to pay roughly $3,600 for services at Visions Day Spa in Ocean City for over a year from March 2004 to June 2005.
The fraudulent activities weren’t limited to luxury services or vacations. In another example, from May to August 2006, the couple used a Bank of America credit card issued to MS to pay $13,273 for flooring and installation at their two Ocean City residences.
They also used their scheme to pad personal accounts in their own names. For example, on May 19, 2007, Joel Swartz deposited a convenience check from Bank of America made out to cash in the amount of $4,000 in the name of MS after forging the signature of MS on the back of the check.
The indictment seeks the forfeiture of property including the defendants’ two Ocean City residences. The residences include a condominium on Wight Street in north Ocean City bought by the couple in 1983 for $172,000. The most recent assessment for that property came in at around $669,000. The couple’s other property, a condominium on the Boardwalk, was purchased in 2006 for $1.4 million, according to State Department of Assessment and Taxation (SDAT) data, bringing the total value of the two properties for which the indictment seeks forfeiture to over $2 million.
The defendants also face a maximum sentence of 30 years and a $1 million fine for the bank fraud and conspiracy to commit bank fraud charges as well as a maximum 15 years in prison for the access device fraud charge. In addition, the couple faces a mandatory two-year prison sentence consecutive to any other prison term for aggravated identity theft, should they be convicted.
As of late Tuesday, federal officials were detaining Joel and Esther Swartz. A detention hearing was scheduled for Wednesday at 3:30 p.m., the results of which have not been made public, although the couple has apparently been released. Yesterday morning, Joel Swartz said he and his wife were heading to Gaithersburg to get treatment for his wife, who was recently diagnosed with lung cancer.