Trustees of the Norwich estate that accountant F. Robert LaSaracina allegedly bilked of millions of dollars are seeking to recover some of their losses from Chelsea Groton Bank, which they claim granted LaSaracina an unauthorized mortgage on estate-owned property in Stonington.
In a lawsuit filed in New London Superior Court, Fredrik Holth, the New London attorney who succeeded LaSaracina as trustee of the Kauppinen family trusts, alleges that in April 2009 the bank granted LaSaracina a $1.3 million mortgage “for an alleged refinance” of two promissory notes secured by previous mortgages granted by another bank, each in the principal amount of $600,000.
LaSaracina’s alleged mishandling of the Kauppinen trusts led to his arrest last October on federal fraud and money-laundering charges.
The suit alleges that Chelsea Groton should have known that LaSaracina’s representations that the refinancing would benefit the trusts were false, and that it would have known “had it exercised reasonable care … in reviewing, approving and granting” LaSaracina’s loan application. Providing LaSaracina with funds to pay off the earlier mortgages “enabled” him to pursue a scheme to defraud the trust, the suit clams.
Chelsea Groton, in a statement issued Monday, denied any wrongdoing and said it is confident it will be “fully vindicated” if the case proceeds.
The bank said it extended a standard commercial mortgage loan to Kauppinen family trusts administered by LaSaracina as trustee “for the purpose of refinancing preexisting loans made to the Trusts by another financial institution. None of the proceeds of the loan made by (Chelsea) were paid to LaSaracina; rather they were used to satisfy existing debt of the Trusts.”
Chelsea Groton, in its statement, went on to say that it is unclear from the trustees’ suit “what the Bank did or failed to do that renders it responsible for LaSaracina’s prior conduct, or how the Trusts were damaged by the Bank’s loan that satisfied the prior loans …”
In addition to Holth, who did not respond to a voicemail message Monday, the suit’s plaintiffs include Kenneth Korsu of Southbury and Heather Korsu of Griswold, trustees of one of the nine Kauppinen family trusts that are known collectively as the Kauppinen Trust.
The $1.3 million loan granted by Chelsea Groton was secured by a mortgage on trust-owned property at 247 and 251 Greenmanville Ave. in Stonington where a Friendly’s restaurant and a EconoLodge motel are located. The site was once the location of the Old Mystic Motor Lodge, one of several hotels once owned by Lillian and Frederick Kauppinen of Norwich, the couple who established the Kauppinen trusts to benefit their three children: Riitta Haley, Frederick Kauppinen Jr. and Ilona Kauppinen.
Attribution:
Kauppinen trustees suing Chelsea Groton
Brian Hallenbeck
June 28, 2011
The Day
http://www.theday.com/article/20110628/BIZ02/306289931/-1/BIZ
Estate of Denial® provides news, analysis and commentary on abusive practices occurring in probate courts and via probate instruments (wills, trusts, guardianships, powers of attorney). We provide original perspective to educate the public regarding this growing threat to both individual freedoms and property rights.
