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A company whose insurance license was revoked for alleged misappropriation of nearly $1 million continues to hold a lucrative, and recently expanded, contract with the city to do work around sheriff sales,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.
Follow Isaiah Thompson on Twitter.