Morning Brief: Housing Bust Hits Condo Buyers

The housing bust is taking its toll on those buyers who put down payments on projects that now stand completed and not fully sold.

Staff writers Paul Schwartzman and Renae Merle report on the trials and tribulations of those who put down payments on condominiums at the 550-unit Dumont.

Richard Hudspeth, one of those buyers, liked to walk by the building watching as workers lay the brick sidewalks, planted grass and installed balconies, some with sweeping views from the U.S. Capitol to the Washington Monument.

A year ago, without having set foot in the building at Fourth Street and Massachusetts Avenue NW, Hudspeth said, he put $15,000 down on a studio apartment priced at nearly $300,000, confident that he'd be moving within months. But he and dozens of other buyers, including some who put down deposits more than two years ago, are still waiting for their deeds. Several months ago, the developer stopped returning calls and e-mails, he said.

"I feel like we have been held hostage," Hudspeth, 52, told The Washington Post. "I've had enough."

Hudspeth is a paralegal who gave up a rental, expecting to move to the Dumont, and now commutes to his District office from a friend's place outside Baltimore.

In other District news, a former bank manager who deposited almost $18 million in fraudulent D.C. property tax checks was sentenced Monday in federal court to 6 1/2 years in prison for his role in a scandal that cost the District almost $50 million.

Walter R. Jones Jr., 34 ignored signs that the refund checks were not legitimate and received hundreds of thousands of dollars for his complicity in the fraud, according to prosecutors.

A teller and later an assistant branch manager at Bank of America in Maryland, Jones was befriended by the scheme's mastermind, Harriette Walters, beginning in 1994. Walters, then a manager in the D.C. Office of Tax and Revenue, plied Jones with gifts and persuaded him to join in the conspiracy.

From 2000 to 2006, Jones deposited 61 checks, totaling $17,941,817, and he helped convert the money into cashier's checks to be distributed to other participants in the scheme.

An unusual coalition of environmentalists, watermen and former officials yesterday filed suit against the U.S. Environmental Protection Agency, asking a judge to overhaul the floundering government campaign to clean up the Chesapeake Bay.

And JetBlue Airways and two officials with the U.S. Transportation Security Administration have paid $240,000 to settle charges that they illegally discriminated against an Iraqi-born U.S. resident who was barred from a flight until he covered his T-shirt, which carried an Arabic phrase.

The settlement was paid Friday to Raed Jarrar, 30, of the District. It ranks among the largest of its kind since the Sept. 11, 2001 terrorist attacks, according to the American Civil Liberties Union, which represented him.

By Alejandro Lazo  |  January 6, 2009; 9:17 AM ET  | Category:  Economy Watch , Morning Brief , Real Estate
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