Bank seeks to recover money on foreclosed property of John B. Torkelsen.
By: Gwen McNamara
He may have avoided a civil trial, but John B. Torkelsen could lose his Princeton Borough home.
A sheriff’s sale of the 7,274-square-foot house at 240 Library Place is scheduled for Wednesday. The home, which sits on 1.05 acres, has an assessed value of more than $1.7 million, according to the borough tax assessor.
It’s being offered for sale starting at $1.1 million plus interest and other costs that Chase Manhattan Bank is seeking to recover after foreclosing on the property.
The sale was postponed from Wednesday due to a restraining order against Mr. Torkelsen in federal court. The restraining order is part of a settlement agreement reached in response to a civil suit against the local businessman, which alleged he and three other defendants defrauded the U.S. Small Business Administration out of $32 million.
"The restraining order requires that no proceedings take place against any assets of Mr. Torkelsen without permission of the federal court," said Paul Shapiro of the U.S. Attorney’s Office for the Eastern District of Pennsylvania, where the civil suit was filed. "So someone will need to get permission from the federal court before the sale can proceed."
Calls for comment on the sale to Mr. Torkelsen’s home on Library Place were not returned. One of Mr. Torkelsen’s attorneys, William Crenshaw of the firm Powell Goldstein LLP in Washington, said neither he nor his client had any comment on the sheriff’s sale.
The U.S. Attorney’s Office in Pennsylvania filed the civil suit under the Mail Fraud Injunction Act in January 2003. The complaint alleged Mr. Torkelsen and three other defendants his wife, Pamela, son Leif, and business partner R. Wood Tate, also a Princeton Borough resident fraudulently obtained funds from the SBA for Acorn Technology Fund, a venture capital firm formerly located in West Windsor and Solebury, Pa.
Mr. Torkelsen signed off on a permanent restraining order in November 2004, which froze his assets and prevents him from doing business directly or indirectly with Acorn without admitting any wrongdoing.
Settlement agreements with Pamela and Leif Torkelsen were reached in December.
According to Mr. Shapiro, Leif Torkelsen has signed off on a permanent restraining order like his father, freezing his assets and preventing him from doing business with Acorn.
Pamela Torkelsen’s agreement calls for her to draw up a list of all assets, which will be put into a "restitution estate" to pay back the SBA, federal government and her attorneys.
According to the settlement, a preliminary estimate puts the value of the proposed restitution estate at $3.3 million. The SBA is expected to receive about $1.5 million, the federal government a total of $1.15 million and the law firm of Schmeltzer, Aptaker & Shepard $400,000, according to the agreement. Ms. Torkelsen is expected to keep about $250,000 in either funds or property.
No agreement has yet been reached with Mr. Tate, said Mr. Shapiro.