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Man faces 25 years in bank scheme

November 19, 1998|By MARLO BARNHART

Attorneys and accountants have until Dec. 18 to determine how much money Preston Lee Stout stole from an estate he was supposed to be managing from 1993-97.

Stout, 52, of 101 Amber Way, Smithsburg, was jailed Wednesday by Washington County Circuit Judge Frederick Wright while awaiting sentencing on one count each of felony theft by scheme and perjury.

"There will be incarceration," Wright said. "This was the systematic looting of an estate."

Wright allowed work release or gave Stout the option of posting a $25,000 bond to gain his freedom pending sentencing.

The former employee of Farmers and Merchants Bank and Trust in Hagerstown has been working at Phoenix Color since he lost his bank job over this incident.

Stout could face a maximum penalty of 25 years in prison. All other charges were dropped in exchange for Wednesday's pleas.

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Stout is being sued civilly by a distant relative of the late John M. Sanderson Jr., who died in 1993.

"The losses are in the many hundreds of thousands of dollars," said Assistant Washington County State's Attorney Arthur Rozes.

The multimillion-dollar civil lawsuit also names Farmers and Merchants Bank and Trust, Stout's wife, and an insurance company, alleging fraud and theft in the handling of the estate.

John Ausherman filed the 31-count civil lawsuit in Washington County Circuit Court Oct. 20, seeking punitive and compensatory damages averaging $3 million per count.

He is seeking the damages from the bank; from Preston Lee Stout and Linda Stout, both of 101 Amber Way, Smithsburg; and from U.S. Fidelity and Guaranty Co., which provided the bond for Preston Stout as personal representative for the estate, according to court records.

Ausherman said he went to the Washington County Register of Wills office shortly after Sanderson died in 1993 and noticed something wasn't right.

Rozes said money was siphoned from the estate and deposited in Stout's personal accounts and was used to pay his personal expenses.

The perjury charge stemmed from statements Stout made to the Judges of the Washington County Orphans Court in April 1997 about the size of the estate.

"This was a horrendous breech of fiduciary duty and trust," Wright said, ordering the sentencing delay. "I need to know what type of man this is."

Wright said he also wants to know more about the scheme.

"There has to be punishment and restoration of the estate," Wright said.

Outside the courtroom, Ausherman said he believes Wright is going to look deeply into the matter before sentencing.

"This has certainly been difficult for both families," Ausherman said, referring to Sanderson's relatives and the Stout family.

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