Portage couple charged with equity skimming
BY Teresa Auch Schultz email@example.com October 4, 2012 5:10PM
Updated: November 6, 2012 6:29AM
A Portage couple is accused of illegally skimming more than $250,000 from their business that was defaulting on $15 million of loans backed by the federal government.
An indictment filed Thursday in the U.S. District Court in Hammond charges James Prange, 76, and his wife, Marilyn Prange, 76, with one count each of equity skimming.
The indictment says they took out loans for their two Lowell apartment buildings, Creekside of Meadowbrook and Creekside of Meadowbrook West. The loans were insured by the U.S. Department of Housing and Urban Development because the apartments were supposed to help moderate-income families, the elderly and the disabled.
Because of an agreement with HUD, the Pranges could use the profit from the apartments only for keeping the apartments in good repair unless they could show they had cash left over after paying off their mortgages each year.
However, the indictment claims that from about March 2009 to March 2010, the Pranges took more than $250,000 from the business while their mortgage went into default and that they never had permission to take that money.
By backing the loans, HUD would normally be on the hook for a defaulted mortgage, although it is not clear in this case if that is still true.
The Pranges filed for Chapter 7 bankruptcy, or liquidation, in 2009 and listed $18.5 million in liabilities.
It was not clear as of Thursday evening if the Pranges had been arrested.