Maryland businessman Alan Fabian, a major Republican Party player, pleaded guilty Friday in what prosecutors call a $40 million fraud scheme, one of the largest in state history.

Fabian, 43, declined to comment as he left U.S. District Court in Baltimore City, where dozens of his supporters watched the Cockeysville resident plead guilty to mail fraud and filing a false tax return in a scheme to defraud businesses, banks and financial institutions.

“Mr. Fabian went to great lengths to make all the paperwork appear to be legitimate,” said Maryland U.S. Attorney Rod Rosenstein.

“When questioned about his transactions, he insisted they were legitimate, even when confronted with clear evidence they were not.”

Fabian, who served as former Lt. Gov. Michael Steele’s finance director during his 2006 bid for U.S. Senate, was indicted in August after he allegedly created two companies to purchase $32 million in computer hardware and software for other businesses.

But Fabian’s companies never purchased the equipment or bought much less expensive equipment, according to the indictment.

“It’s huge, huge — it’s a massive level of fraud here,” said U.S. District Judge Richard Bennett, before limiting Fabian’s travel to Maryland, Washington, D.C., and Northern Virginia before his Sept. 22 sentencing hearing.

Fabian’s attorney James Wyda said the businessman admits to a fraud scheme between $7 million and $20 million.

“Mr. Fabian is accepting responsibility for his wrongdoing,” Wyda said.

Fabian, a certified public accountant, has donated more than $44,000 to Maryland’s Republican Central Committee and various GOP candidates since 2001, the year federal prosecutors say he began the scheme.

lbroadwater@baltimoreexaminer.com