Couple accused of defaulting on loan pleads not guilty
By Teresa Auch Schultz firstname.lastname@example.org October 16, 2012 3:44PM
Updated: November 18, 2012 6:50AM
A local couple pleaded not guilty Tuesday morning to a charge they illegally skimmed more than $250,000 while defaulting on a $15 million loan backed by the federal government.
During the arraignment at the U.S. District Court in Hammond, U.S. Judge Andrew Rodovich set the trial for James and Marilyn Prange, both 76, for Dec. 17.
The Pranges, who own a home in Hammond and have been connected to Portage, were accused earlier this month of equity skimming.
An indictment claims that the husband and wife, who have been involved in other local real estate development, took out two loans totalling $15 million several years ago for 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, which means the federal government is on the line if the Pranges default.
Part of the loan backing restricted the Pranges from using any business profits, except for keeping their business in good repair, until they could prove they had made their yearly mortgage payments and had money left over.
However, the two are accused of taking more than $250,000 from March 2009 to March 2010 while they defaulted on their loans.
It is unclear if HUD had to pay money for their defaulted mortgage.
The two filed for Chapter 7 bankruptcy, or liquidation, in 2009 and listed $18.5 million in liabilities. They have also faced several lawsuits in Lake County courts over money owed to banks.