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FLORIDA STATE COMPTROLLER TAKES LEGAL ACTION AGAINST MIAMI COMPANY

 TALLAHASSEE, Fla., Aug. 19 /PRNewswire/ -- State Comptroller Gerald Lewis today took legal action against a Miami company and four of its associates for allegedly defrauding both investors and borrowers in a mortgage-lending scheme.
 The lawsuit, filed in Dade Circuit Court, charges Rein Realty and Mortgage Company, which does business under the name of United Mortgage, and four of its associates with fraud, misappropriation of funds and operating without a license.
 A related company -- R.A. Mortgage Company -- also was a named a defendant.
 The lawsuit contends that the operation has misappropriated and failed to account for at least $200,000 entrusted to it by both investors and borrowers, Lewis said.
 The company operated by brokering mortgage loans to primarily poor credit-risk borrowers -- loans that generally carry high interest rates and fees -- with funds from private investors.
 The lawsuit accuses the defendants of failing to account for a substantial amount of money given to it by investors, failing to apply payments made by borrowers toward their mortgages and using the name United Mortgage as a "subterfuge to avoid liability from investors and borrowers."
 Moreover, one of the defendants -- Edward R. Gale -- solicited a large portion of the funds received from investors despite the fact the neither he nor the company disclosed Gale's 1988 bank larceny conviction involving a $1.3 million embezzlement in Miami earlier that year.
 The lawsuit seeks a court order halting the illegal operation and the appointment of a receiver to take control of the remaining assets of the company.
 "We will not tolerate any company preying upon our citizens," Lewis said.
 He added that his office has been in contact with South Florida law enforcement officials over the case.
 -0- 8/19/93
 /CONTACT: Terence McElroy of the Florida Office of Comptroller, 904- 488-4844/


CO: Florida Office of Comptroller; Rein Realty and Mortgage Company;
 R.A. Mortgage Company; United Mortgage ST: Florida IN: SU:


AW-XX -- FL003 -- 4321 08/19/93 12:25 EDT
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Publication:PR Newswire
Date:Aug 19, 1993
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