Mortgage firm accuses founder of fraud

WAUWATOSA, Wis., Feb. 4 (UPI) -- A major Wisconsin mortgage banking firm has accused its founder and other top executives of defrauding it out of at least $15 million, court documents show.

Central States Mortgage Co. in Wauwatosa alleges founder Richard Jungen and the others diverted money from Central States to another corporate entity they had formed in 1992, Interim Funding, the Milwaukee Journal Sentinel reported Wednesday.

According to the lawsuit filed this week in Milwaukee County Circuit Court, the defendants used Interim Funding, which provided bridge loans that were sold to credit unions, to their personal advantage.

"These defendants manipulated the business of CSMC to its detriment, treated CSMC as a personal bank by shifting losses of Interim to CSMC, and improperly caused CSMC to purchase, retain or purchase interests in delinquent mortgage loans, foreclosed mortgage loans or real estate owned properties, all for the benefit of Interim and its members," the lawsuit alleges.

The other defendants are Elaine Jungen, Jungen's estranged wife and president and secretary of CSMC; Jerome Poehnelt, chief financial officer and treasurer; Charles Miller, vice president for production; and Kevin Dwyer, the senior vice president for sales.

The defendants or their lawyers either had no comment or could not be reached, the newspaper said.