Federal officials in Texarkana, Texas, have charged a former administrator of the Magnolia, an assisted living facility which caters to Alzheimers patients, with equity skimming.
An information filed last week in the Texarkana Division of the Eastern District of Texas accuses Antonio Otero of equity skimming in connection with a mortgage insured by Housing and Urban Development. According to court documents, Otero has entered into a plea agreement with the federal government.
Mortgages insured by H.U.D. require payment of the mortgage before any surplus funds can be distributed. The information alleges Otero violated that law and the Magnolia is millions in default on its mortgage, leaving H.U.D. responsible.
The information alleges that Otero received approximately $350,000 in addition to his regular salary and that the Magnolia is now $6 million in default on the loan.
The complaint alleges the Magnolia made regular payments for months after the construction was complete but that from July 2011 through at least December 2015 the Magnolia was in default.
Otero faces imprisonment for not more than five years; a fine of not more than $500,000 or twice any pecuniary gain to the defendant or lossto the victim(s); and a term of supervised release of not more than three years. Otero is scheduled for arraignment and a plea hearing Oct. 21 before U.S. Magistrate Judge Caroline Craven.
