ABC Capital's Walsh sentenced in jilted homebuyer case

Jay Walsh of ABC Capital was accused by investors of running a Ponzi scheme that affected thousands of households in Baltimore and Philadelphia. He was convicted of selling home improvement items without a license and ordered to pay $20,500 in restitution.

Baltimore District Court Judge Kent Boles Jr. acquitted Walsh of the most serious charge against him: theft. Still, Thursday's verdict was a rare victory for those who accuse Walsh of shirking responsibility.

Walsh's company sold dozens of homes in run-down neighborhoods to investors – many out of state – with the promise of renovating and renting them out. But ABC often reneged on its promises, leaving the company begging for help and the neighborhoods deteriorating further, according to civil lawsuits and an investigation by the Baltimore Banner.

The criminal case was brought on behalf of a jilted investor by the Maryland Home Improvement Commission, a consumer protection agency under the Department of Labor. Investigator Stanley Appel said he hoped the conviction was “a small stone that cracks the window.”

The investor at issue in the case, victim Fernando Iacomacci, traveled from abroad to attend the trial. He said he stuck with the case because he knew it was bigger than him.

“I believe in the U.S. legal system,” he said through an interpreter, his nephew. “But you have to follow the steps and make an effort to make the justice system work.”

Walsh declined to comment outside the courthouse.

The international real estate case was a special case on the city's district court's agenda, where other cases involved disputes between neighbors, property damage related to an incident of aggression behind the wheel and unauthorized use of a motor vehicle.

Walsh's attorney, Kevin Carr, argued that Walsh should not be held personally or criminally liable for his company's actions and that the matter belongs in civil court.

ABC Capital filed for bankruptcy after its problems became public, and a trustee overseeing that process found the company had no assets – essentially, dozens of pending civil cases were keeping it busy. Walsh now lives in Aruba, where he continues to provide real estate consulting.

Judge Boles sentenced Walsh to six months in prison, with the entire sentence suspended, and ordered that restitution be paid within a month. Boles said he would likely commute the sentence to pre-sentence probation if Walsh complies; he said he could impose a prison sentence if he does not.

Walsh said he would make the payment through his attorney's trust account.

Through a real estate agent in Florida, Iacomacci came into contact with Walsh and entered into a contract to purchase a home in the 2500 block of Hollins Street in late 2022. The contract called for Walsh's company to completely renovate the home for $20,500.

Iacomacci's nephew, Giancarlo Iacomacci, visited the property in the spring and saw that it was boarded up. He called a home inspector and, when he went inside, saw that the house was in “terrible” condition, including mold and unstable floors and steps.

“I felt unsafe on the property,” testified Giancarlo Iacomacci.

They said they tried to reach Walsh, but at some point he stopped responding.

At one point, Boles asked Assistant State's Attorney Samantha Danzinger what condition the property had been in before the sale. Danzinger said the question was irrelevant to whether Walsh defrauded the investor.

“Someone without a license has no right to enter into such contracts,” said Danzinger.

Boles acquitted Walsh of theft charges, saying that within ABC Capital, Walsh was not solely responsible for carrying out the renovations. However, he convicted him of selling home improvement products without a license and acting as a contractor without a license, and merged the two companies.

Meanwhile, the Maryland Insurance Department is conducting an investigation into transactions involving ABC Capital that were handled by a now-defunct title company, Castle Title. Allegations include forged deeds and payments for home purchases that never occurred.

The Pennsylvania Attorney General's Office settled with Walsh earlier this year for unfair or deceptive trade practices, allowing him to avoid paying fines or admitting wrongdoing.

Appel, the Home Improvement Commission investigator, said he hopes more alleged victims of unlicensed and sloppy contractors will come forward, but the agency has limited resources.

“So many people think, 'I gave this guy a certain amount of money and he ran off with it, and there's nothing I can do except try to pursue him civilly,' but that's not the case,” Appel said. “We're there to advocate for consumers. We can do something. We can protect people.”