Ponzi Suspect Shoots Self
$4 million missing from Robert Kurland’s mortgage company
June 29, 2005
By PATRICK CROWLEY
With his subprime mortgage company in disarray, millions of his investors’ dollars missing and a pending investigation by state regulators, Robert Kurland must have felt there was no way out.
So five days after Florida financial regulators opened an investigation into his south Florida mortgage company — Kurland killed himself with a bullet to the head.
Now the Florida Office of Financial Regulation is trying to unravel what happened to $4 million that had been invested with the mortgage lender, who died of the self-inflicted wound on April 12. He was 78 and had done business in Florida for decades.
Regulators say they can only account for about half of the $7.9 million that investors pumped into the veteran subprime lender’s Miami mortgage operation.
John W. Kneissel, area financial manager for the Office of Financial Regulation in Miami, said state regulators believe Kurland’s company was insolvent and that $3.9 million may have been misappropriated.
The state has filed a lawsuit against the company in Miami-Dade Circuit Court. A judge has placed the company in receivership while its finances are being investigated, court documents show.
“The (state) has…discovered that approximately 70 Florida and out-of-state investors have contributed approximately $7.9 million into this venture,” according to a copy of the state’s lawsuit. “However, these investments have been found to be secured by only approximately $3.9 million in mortgages.
“The…review of the books and records of Kurland Mortgage reflect that the company appears insolvent and that investor’s funds may have been misapplied,” the state said.
Court records indicate that the state launched investigation on April 7 after receiving a written complaint from an investor. On April 10, the day before he died, the state claims Kurland wrote checks from an escrow account he controlled that totaled $150,000.
A $45,000 check to an investor bounced, the state said.
As of April 29, cash in the bank accounts at Kurland Mortgage totaled less than $19,000; at the time the company owed $3.9 million to investors and others.
The state believes Kurland may have been running a Ponzi scheme by paying off existing investors with money from new investors.
“Without the knowledge of the investors, Kurland Mortgage used investors’ funds, in part or in whole, to pay prior investments,” according to the state’s lawsuit.
The state believes Kurland committed several acts of mortgage fraud as well as other violations of Florida real estate and mortgage laws.
“Kurland Mortgage knowingly and willfully concealed a material face and/or made a false statement or representation to its investors and borrowers, and obtained property by willful misrepresentation or false promises,” the state alleges in its lawsuit.
The state also portrays a company in disarray. It “failed to record satisfactions of mortgages for some of its loans after it had received full payment on those loans.”
“Kurland Mortgage records are incomplete,” the state claims. “Computer records do not identify the check numbers, payment amounts or the accounts on which the checks are drawn for payments to investors.”
Kurland was the only owner and employee of the company, which according to the state has 62 open loans and foreclosures.
“With Mr. Kurland’s death,” the state said, “there is no one at Kurland Mortgage who is statutorily qualified to service Kurland Mortgage’s loans.”
