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This is a forwarded message
From: Nader Red Adeeb <radeeb@xxxxxxxxxx>
To: <>
Date: Monday, April 17, 2000, 8:23:02 AM
Subject: TRUST COMPANY IN ORLAND PARK SHUT OVER LOSSES
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The following article was taken from 4/15/2000 Chicago Tribune. Given that
this has not happened in a long time we are not 100% sure what is going to
happen. The trust accounts at Intrust maybe transferred to another trust
company and the customers may continue just as before. Unfortunately, at
this time we don't know what the state of Illinois will do.
TRUST COMPANY IN ORLAND PARK SHUT OVER LOSSES
STATE SAYS $68 MILLION IS MISSING
By Douglas Holt
Tribune Staff Writer
April 15, 2000
In what regulators called the first failure of an Illinois trust company
since the Great Depression, state banking officials shut down the
Independent Trust Corp. on Friday and accused the Orland Park-based firm of
mismanaging an estimated $68 million.
Officials also froze $2.1 billion in assets held by the firm in 21,500
customer trust accounts.
Independent Trust was "operating in an unsafe, unsound and unlawful manner"
and wouldn't be able to pay all demands of its customers, according to a
statement issued by the Illinois Office of Banks and Real Estate.
The closure marked the first failure of a state trust institution since
1934, said Scott Clarke, assistant commissioner of the Banks and Real Estate
Office. The last failure of a bank in Illinois was in 1993, Clarke said.
"Certainly it is a significant inconvenience, and some customers may suffer
losses," he said.
The missing millions appeared to have been invested with Intercounty Title
Co., now under scrutiny by federal agents for alleged misappropriation of
funds, state officials said.
Randall Samborn, spokesman for U.S. Atty. Scott Lassar's office, declined to
comment or confirm whether federal authorities were investigating
Intercounty Title.
The title company, located at 120 W. Madison St., already has surrendered
its state license to do title work, Clarke said.
In 1991, Intercounty Title agreed to pay the U.S. Department of Housing and
Urban Development $1 million to settle charges of paying illegal kickbacks
to get business.
Independent Trust, which has a branch in the Loop, was responsible for $2.1
billion in assets in 21,500 trust accounts--a mechanism often used to
protect assets and derive tax benefits.
The missing $68 million amounts to only about 3 percent of total assets. But
because the institution's owners lacked capital to make up the loss, state
regulators moved in to shut it down.
The company deals in a variety of investments and property, but the bulk of
its assets were in individual retirement accounts, Clarke said.
The state hired PricewaterhouseCoopers as receiver, responsible for
transferring all assets of the institution to a successor trustee and for
paying out claims.
The state will send all customers a letter detailing procedures for filing
such claims, and instructions are supposed to be posted on the institution's
Web site at www.intrust.com, Illinois officials said.
But as of Friday, the site's only message to customers offered assurances
that the firm had experienced no Y2K glitches.
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Best regards,
MS
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