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Press Release

Asset Manager Sentenced to Two Years in Prison for $5 Million Fraud Scheme

For Immediate Release
U.S. Attorney's Office, District of Maryland
Redirected Funds Intended to Be Applied to Defaulted Commercial Mortgage Loans Into Bank Accounts He Controlled

Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Max Wagenblast, age 35, of Arlington, Virginia, late on November 9, 2015, to two years in prison, followed by three years of supervised release, for wire fraud in connection with a scheme to steal over $5 million from his company.  Judge Chuang also ordered Wagenblast to pay a fine of $25,000.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.

According to the his plea, Wagenblast was employed as an asset manager for a Bethesda company (the company) that was the second largest Special Servicer of commercial real estate mortgages in the United States.  As a Special Servicer, the company was responsible for administering defaulted commercial mortgage loans and the real estate securing foreclosed loans.  The company performed this service on behalf of the Real Estate Mortgage Investment Conduit (“REMIC”) trust that held the mortgage loans on behalf of the certificate holders of the trust.  In its capacity as a Special Servicer, the company collected borrower payments and property cash flow and remitted them to the REMIC trust, which was responsible for distributing those funds to the certificate holders.  Wagenblast oversaw both the loans and properties that acted as security for the loans serviced by the company, including the application and utilization of funds generated by the properties he managed.

Wagenblast admitted that he redirected a portion of the funds collected from the properties he managed into the bank accounts of three limited liability companies he controlled.  Those redirected funds should have been sent to the company and then forwarded to the REMIC trust bank accounts.  Wagenblast obtained these funds in three ways: by sending fake invoices to the property managers and directing them to wire the funds for payment into one of the bank accounts Wagenblast controlled; by creating fake service contracts and again directing the property managers to wire the funds for payment into one of the bank accounts Wagenblast controlled; and by sending the property managers an email requesting that all wires in excess of $10,000 be sent to a bank account Wagenblast controlled.

The company conducted a search of Wagenblast’s work computer and found documents detailing the fraudulent activity, including a spreadsheet detailing each diverted funds transaction that listed the amount taken, the property from where the funds originated, the date of the transaction and the bank account into which the funds were directed.  From September 2012 through September 2013, Wagenblast caused over $5 million to be wire transferred into bank accounts he controlled

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit

United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman, who prosecuted the case.

Updated November 10, 2015

Financial Fraud