City worker tied to bad loans
Post-Tribune (IN)
March 6, 2009
March 6, 2009
GARY -- Gary's director of Community Development helped run a now-defunct title company where as much as $400,000 meant to pay off clients' mortgages went missing, records show.
Jacquelyn Drago - Hunter , who now oversees millions in federal dollars in her position with the city, denies playing any role in the scheme at Maximilian Title Corp.
State filings list Drago - Hunter as Maximilian's secretary and one of its principals. Elsward Hunter , her husband and president of the company, died in 2007.
Indiana Commissioner of Insurance James Atterholt ordered Maximilian to cease and desist all business in June after its underwriter accused it of "improperly withholding, misappropriating, or converting monies received in the course of doing insurance business."
Drago - Hunter was the settlement agent in at least two documented cases. A letter written by an attorney for the Indiana Department of Insurance to one victim last month suggests the issue could spill back into court.
"Your presence as a witness may be requested," attorney Kathy Hulbert told Miller resident Norman Ginn Jr.
Drago - Hunter said the missing money was taken by two employees she wouldn't name and who she said are now deceased. She said she isn't aware if a police report was ever filed against the thieves, but she said she is the person who uncovered the discrepancies and told the underwriter.
"I was the one that shut the company down," Drago - Hunter said.
'What payment?'
Norman Ginn and his wife, Willena Ginn, visited Maximilian's offices at 5th Avenue and Broadway in 2006 when they decided to refinance the mortgage on their Miller home. Wells Fargo, the bank doing the refinancing, referred them to Maximilian.
The meeting was cordial. Drago - Hunter notarized the new $73,000 mortgage for the Ginns and the Ginns considered their first mortgage debt satisfied.
Two years later, the Ginns' phone rang. It was a collection agent, wondering why the couple stopped making payments on that debt.
Norman Ginn's response: "What payment?"
"After two years, you know, I had totally forgotten about it," Norman Ginn said.
According to court records filed in July, the Ginns still owed $51,792 in principal on their 2001 mortgage. Collectors came down hard on the couple, Norman Ginn said, threatening to kick them out of their home.
"They were real nasty," Norman Ginn said. "They wouldn't listen to a word I had to say."
Maximilian dissolves
The Ginns were forced to hire an attorney to help them clean up the mess. United General Title Insurance Co. wrote a check for $59,047 to pay off the original loan with interest, documents show, terminated its contract as Maximilian's underwriter and called the Indiana Department of Insurance.
Hulbert, an attorney in the department's title division, petitioned for a cease and desist order against Maximilian on June 5.
According to that petition, United General said Maximilian continued making monthly payments on clients' mortgages instead of paying them off. Mike Trimble, a title division investigator, filed an affidavit confirming that claim.
"United General has reported that the missing funds total between $300,000-$400,000," Hulbert wrote in her petition.
Commissioner Atterholt granted the order the next day. By then, however, state records show Maximilian had voluntarily dissolved. The case appeared to be dormant until last month, when Hulbert mailed Ginn a letter.
"I am pleased that there was a successful resolution of your title insurance issue, and I am closing your file," Hulbert wrote. "It will become a part of the litigation file that I am preparing for Maximilian Title."
Stephen Robertson, director of the Indiana Department of Insurance's title division, declined to comment this week on the specifics in the Maximilian case beyond the public record. He said his office has no law enforcement authority, but it can take several regulatory actions against an agency.
Robertson also said his office could refer a situation to state or local law enforcement agencies.
"We want to make sure that we have a basis to do so," Robertson said.
A United General representative said the company doesn't comment on pending litigation. Frank Jury, Drago - Hunter 's attorney, declined comment as well.
Drago - Hunter , meanwhile, said she's received no correspondence from United General or the Indiana Department
"Obviously, I'm not a part of it because I don't have a letter from them," Drago - Hunter said. "I'm sure that if I were guilty of anything I'd be getting some letters."
Lake-front property
The Ginns weren't the first homeowners to have trouble with Maximilian Title. A similar problem nearly scuttled the sale of a house on County Line Road overlooking Lake Michigan, according to court documents.
Anna Panagiotaros refinanced that home in 2003, records show, closing the deal in the same office as the Ginns and working with the same closing agent: Drago - Hunter .
Drago - Hunter denied ever being a co-owner of the company, despite her identification as such in Panagiotaros' complaint. She said she was merely a board member.
Panagiotaros expected $254,104 owed to Washington Mutual Home Loans for the mortgage on that property to be paid off, but Washington Mutual said it was still receiving monthly payments on the mortgage one year later, court records show.
Meanwhile, a buyer had committed to purchasing the home from Panagiotaros, according to one filing, but the sale couldn't go through until Washington Mutual released the mortgage.
The case was eventually dismissed with prejudice after Maximilian wired $254,212 to Washington Mutual to pay off the mortgage, records show, and Panagiotaros transferred the property to a new owner through a warranty deed in July 2004.
The title division of the Indiana Department of Insurance didn't exist until 2006, Robertson said, and the Panagiotaros case doesn't appear to be a part of Hulbert's file. Panagiotaros declined to comment for this story.
Drago - Hunter pointed to her dismissal from that case as proof of her innocence. She again insisted that the employee who took the money died before the scam was uncovered.
"There was nothing you can do about that," Drago - Hunter said. "What are you going to recover?"
* Drago - Hunter worked at company that didn't pay off mortgages.
Caption: Jacquelyn Drago - Hunter (right), Gary's director of community development, mingles before the State of the City address at the Genesis Convention Center in Gary on Feb. 24. Stephanie Dowell/Post-Tribune
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