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Miami Men Charged with Stealing $1 Million in Mortgage Transaction Scheme

12/21/2005

CONTACT: 
Nina Banister
(850) 413-2842 
 
MIAMI—A Miami man is facing more than four dozen felony charges after surrendering Tuesday to insurance fraud detectives with the Department of Financial Services investigating the theft of nearly $1 million in a 2002 mortgage transaction.  The diversion led to foreclosure of a home and put a title company out of business.  A second man wanted on similar charges is now considered a fugitive.
 
John S. Walters, 43, is charged with 52 separate counts of money laundering, organized scheme to defraud and first-degree grand theft, and potentially faces more than 700 years in prison if convicted on the charges.  He was booked into the Miami-Dade County Jail, and bond is set at $1 million.  Paul Allen Menzel, 49, is wanted on charges of organized scheme to defraud and first-degree grand theft.
 
"These individuals' actions caused serious financial and emotional devastation," said Florida's Chief Financial Officer Tom Gallagher, who oversees the department.  "What they did is unconscionable and calls for the maximum punishment afforded by law."
 
Menzel, a former contract closer employed by Title Company of the South, allegedly diverted an escrow account check of more than $997,000 made out to Butler & Hosch, PA, an Orlando law firm. The check was intended to pay an outstanding mortgage loan for a home on Paloma Drive, but instead Menzel diverted the check to John Walters, the corporate representative of the property seller, A Auto Insurance.  Then, between December 2002 and February 2003, Walters opened a checking account at Ocean Bank in the name of Butler & Hosch Corp – Trust Account, and deposited the stolen check by forging the endorsement.  Detectives said Walters bought a new car, paid personal debts, and had repairs made to his home.  Menzel received more than $37,000 from the proceeds. As a result of the theft, the prior lender foreclosed on the new owner, and Title Company of the South was put out of business.
 
The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case or another possible fraud scheme should call the department's Fraud Fighters Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to a conviction.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Tom Gallagher oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. Gallagher also serves as the State Fire Marshal.