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http://www.suntimes.com/output/business/inter06.html
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Chicago Sun Times
3,000 Intercounty investors repaid
October 6, 2000
BY TAMMY WILLIAMSON BUSINESS REPORTER
Some 3,000 homeowners whose escrow was held at the now-shuttered
Intercounty National Title Insurance Co. have gotten their money
back, the trustee appointed to handle claims against Intercounty said.
The trustee, Fidelity National Financial Inc. of Santa Barbara,
Calif., said it has paid out $30.6 million.
State officials closed down Intercounty in June after learning that
money was stolen from its accounts.
"Claims will continue to dribble in over the next few weeks, [but]
$30.6 million is essentially everything that's come in so far," said
Al Stinson, Fidelity executive vice president and chief financial
officer. Stinson said Fidelity now estimates there could be $36.3
million of claims, based on Intercounty records.
"If more come in, we'll evaluate them as they come in," he said.
People with claims against Intercounty can call Fidelity at (312) 223-
3469 or (949) 622-4151.
In a separate development, officials sorting out how to make up $68
million of money that was stolen from investor accounts at
Independent Trust Corp. of Orland Park have taken the next step.
Intercounty and Independent Trust, also called Intrust, are closely
linked: For a number of years, Independent Trust transferred millions
of dollars of its clients' money to Intercounty to put into short-
term investments. Independent Trust, which serves as a custodian for
retired investors, was owned by Jack Hargrove. He, with attorney
Laurence Capriotti, controlled the account from which money was
missing. The two also managed an escrow account at Intercounty. They
are being investigated by state and federal officials. Both have
denied wrongdoing.
Cook County Circuit Court Judge Sidney Jones on Wednesday ruled on
how to value the accounts of the 17,000 customers of Intrust as of
April 30. Intrust was shut down that month.
The formula will determine net deposits made to the account in the
previous year and calculate those accounts' appreciation based on the
performance of the Standard & Poor's 500 Index. The S&P grew 8.8
percent between April 30, 1999, and April 28, 2000.
But the more important question--how much this is going to hit
investors--is probably several weeks away from being answered, said
Scott Clarke, assistant commissioner of the Department of Banks and
Real Estate, which regulated Intrust.
Earlier proposals had suggested deducting 6 percent of each
investor's investment value to make up for the shortfall. But some
investors have filed to be exempted from having their money reduced,
and those matters remain before the court.
Ultimately, officials investigating Intrust executives hope to
recover the money from those who committed the fraud, Clarke said,
and then investors could be repaid. That could take years.
Fidelity's Stinson said his company also hopes to regain what it has
had to pay out by going after assets belonging to the perpetrators,
once it is determined who stole the money.
In the meantime, Independent Trust customers have begun a letter-
writing campaign to state politicians, including Gov. Ryan. Dozens of
letters from investors have been sent, asking that the state
regulator be investigated.
"It is reprehensible that we, the account holders, many who are
retired Illinois citizens on a fixed income, be charged for the
missing $68 million when our tax dollars are paying for proper
supervision by a state government regulator," according to a form
letter being sent to the governor.
Ryan spokesman Nick Palazzolo said the governor hasn't made any
mention of the letters.
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