Richard Jungen Files for Chapter 7 Bankruptcy After Getting Out of Prison

by San Antonio Attorney

After seven years of imprisonment, Richard Jungen, a former top executive of a big mortgage banking company, has declared bankruptcy.

Jungen, the founder of Central States Mortgage Co., has stated $361,000in assets and $18.9 million in debts in his Chapter 7 bankruptcy petition.

He said in a short interview that he has no assets and he is dealing with $15 million in bank judgments.  Since he was in prison for many years, he said his bankruptcy shouldn’t come as a surprise.

Aside from his lenders, Jungen also owes $540,000 to his lawyers, whom he has not paid $for their sevices.

A Chapter 7 bankruptcy involves liquidation of assets to repay creditors.  There are exempted assets, like homestead and pension funds, that are protected from the bankruptcy proceedings.

The following are some of Jungen’s biggest creditors and the amount he owes them:

•           Ridgestone Bank – $1.234 million.

•           M&I Marshall & Ilsley Bank – $788,946.

•           Johnson Bank – $348,404.

•           Prime Financial Credit Union – $105,639.

Before Central States was closed, which laid off about 200 workers, Jungen was a renowned and esteemed figure in the mortgage lending industry.

The Central States ultimately shut down after a long internal strife at the firm that ended in the upheaval of Jungen and others.  The board took legal action against Jungen and other previous executives for allegedly defrauding Central States out of $15 million.  He and the other accused executives denied the charges and the lawsuit was eventually dropped when mortgage firm went into bankruptcy.

Jungen, along with 3 associates, were charged of a serious crime in 2013 for designing a scheme to unlawfully pay about $9 million of the firm’s money to themselves and also other investors.

In 2015, Jungen pleaded guilty to obstruction of justice and prosecutors dropped charges of embezzlement and fraud.

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