THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, June 19, 1996 TAG: 9606190372
SECTION: LOCAL PAGE: B7 EDITION: FINAL
SOURCE: BY LYNN WALTZ, STAFF WRITER
DATELINE: NORFOLK LENGTH: 42 lines
Former developer Michael T. Wise, a central figure in the Suffolk Housing and Redevelopment Authority scandal, was sentenced Tuesday in federal court to three years' probation and $25,000 restitution to bilked subcontractors.
Wise, 47, of Norfolk, owner of Tidewater Land Corp. of Portsmouth, pleaded guilty in January to bank fraud on a construction loan for a low-income Suffolk apartment project.
Wise admitted diverting nearly $31,500 of the $250,000 in loans on the project by underpaying six subcontractors for renovation of the Rawls Apartment project at 318. N. Main St. in Suffolk.
To receive progress payments from the bank for continued work on the 12-apartment complex, Wise falsified work progress papers and inflated the cost of work that was done. He pocketed the difference in what he received from the bank and what he paid to subcontractors.
In 1992, The Virginian-Pilot detailed mismanagement in the Suffolk rental rehabilitation grant program. The investigation showed that the authority gave grants that were designated for low-income housing to developers who used them to build luxury apartments. Some projects were not inspected, and at least one row of homes later had to be demolished because they did not meet minimum standards.
Wise declared bankruptcy after he exhausted a $90,000 housing authority grant and more than $232,000 in bank loans that had been designated for the project.
The Department of Housing and Urban Development estimated that more than $50,000 of the $90,000 grant that Wise received for the apartment was misused.
Tuesday's sentencing did not permit the court to order restitution on the grants because Wise only admitted defrauding the bank, not the housing authority, state or federal government. ILLUSTRATION: Photo
Michael T. Wise, 47, of Norfolk pleaded guilty in January to bank
fraud.
KEYWORDS: BANK FRAUD ARREST SENTENCING
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