A company whose insurance license was revoked for alleged
misappropriation of nearly $1 million continues to hold a lucrative, and
recently expanded, contract with the city to do work around sheriff sales,
AxisPhilly has found.
The company, Aracor Search & Abstract Services, Inc.,
was founded in 1994 by Anthony R. Angelo, the current president, according to
its website. In the realm of city contracts, where successful bids do not
infrequently correlate with political connections Angelo doesn’t stand out as a
political player: He did donate $1,500 to Brady’s catch-all political campaign
fund—but only once, in 2007. He also donated $500 to then-candidate for sheriff
Jewell Williams in 2011.
Aracor has also been around a while. Its Revenue Department
contract to perform title searches for properties the city plans to take to
sheriff sale is over a decade old. City spokesman Mark McDonald says that city
officials haven’t been aware of any problems or complaints regarding the
company’s performance.
But outside of its city work, Aracor’s reputation has been
less impeccable.
Last June, AxisPhilly found, the state insurance commission
stripped Aracor and its president and founder Anthony Angelo of its insurance
licensing in a consent order, signed by Angelo individually and on behalf of
his company. The order required the company to pay restitution for what the
document describes as the “misappropriation” of nearly $1 million.
The revocation of Aracor’s license, the document and state
officials have made clear, bars the company and its president from engaging in
any insurance business in Pennsylvania.
Asked about the revocation of Aracor’s license and the
apparent allegation of misappropriation surrounding it, city spokesman McDonald
said that city officials had not been aware of the consent order prior to
AxisPhilly’s bringing it to his attention and that city officials plan to have
a “conversation” with Aracor about the matter.
He also added that the company’s work for the city, which
consists of title and lien searches, does not appear to involve actually
providing insurance, and that city officials with whom he had spoken did not
believe that Aracor needs a valid insurance license to do that work. A source
familiar with Aracor’s proposal for that contract says that while the request
for proposals did not mention requiring a valid insurance license, Aracor did
submit its insurance license as part of its bid.
What Aracor is alleged to have done wrong is not entirely
clear.
The state insurance commission consent order does not give
details about the alleged “misappropriation,” nor does it contain an explicit
accusation or admission of guilt or responsibility.
It merely states that another company canceled contracts
with Angelo and his company “for misappropriation of funds of approximately
$997,221,” and that state law “prohibits a licensee or applicant from
demonstrating a lack of general fitness, competence, or reliability,” and
Angelo and his company had “violated” that rule.
State officials declined to elaborate or offer supporting
documentation.
[Document: Read the Pa. Insurance Commission consent order
signed by Aracor's president below]
But a civil lawsuit in which Aracor is a named defendant
does offer some clues.
In a complaint filed in federal court in Philadelphia, a
Bucks county couple claim that they began to receive notices of a default on
payment for a mortgage, which Aracor was allegedly supposed to have paid off in
closing a refinancing deal on their behalf.
According to their complaint, it was only after repeated
threats of foreclosure that the couple was notified by another company, Stewart
Title Insurance Company, which apparently insured Aracor’s transactions, that
Aracor “had improperly failed to pay the funds to satisfy [the plaintiff
couple’s] mortgage … [and] misappropriated those funds for its own use” and
that Stewart Title would be responsible for the payment. It is to Stewart Title
that Aracor has agreed to pay restitution of roughly $997,000; Stewart Title
did not respond to a request for comment.
The couple in question declined to comment for this story,
citing the ongoing litigation, but claim in their lawsuit that that they have
suffered damaged credit ratings resulting from “failing” to make payments on
the loan Aracor was supposed to have paid off.
Pennsylvania Insurance officials would not comment on the
details of the case but confirmed that Angelo’s and Aracor’s insurance licenses
remain revoked and that neither is permitted to engage in insurance business.
Angelo did not return a call requesting comment, but an
attorney from the Philadelphia law firm Meyerson & O’Neill, replying on
behalf of Aracor, acknowledged its contract with the city and stated that the
work “is essentially a search and abstract product”—not, in other words,
insurance, and that “Aracor has the necessary license and… coverage for all of
its products.”
When a reporter pointed out that the company’s website still
offers, under its “services” tab both
“Title Search” and “Title Insurance,” a company employee replied that Aracor
“[does] not sell insurance policies” and that the company has been “in touch
with an IT professional to revamp the website.”
There are other signs that all is still not well at the
company: The Internal Revenue Service filed four tax liens against Aracor in
2013, totaling nearly $457,000. Last year a New Jersey company secured a
judgment against the company for another nearly $32,000.
One place Aracor’s business seems to be doing well, however,
is the City of Philadelphia.
Over the years, the value of Aracor’s contracts has
increased: from $60,000 in 2006 to $250,000 in 2012—and grew significantly
larger in just the last year. Last March, just a few months before the company
was stripped of its insurance license, Aracor’s contract with the city was
increased from $250,000 to $495,000. Put another way, it doubled.
More information and additional documents can be found out
the source.
Source: AxisPhilly.com
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