Funds investigation to delay CFI earnings report
By JEFF HARRINGTON
© St. Petersburg Times, published April 4, 2001
CLEARWATER -- CFI Mortgage Inc. said it will be late in reporting fourth-quarter earnings because of a deepening investigation into whether a former executive is to blame for missing CFI funds.
Gary Fioretti was executive vice president and director of mortgage operations for the Clearwater mortgage company until CFI fired him "for cause" in February. Until this week, CFI declined to give details about Fioretti's departure, other than saying in March that it was of a "sensitive nature" and under investigation.
CFI chairman and chief executive Stephen Williams confirmed Tuesday, however, that federal investigators are checking into links between missing CFI Mortgage payments and a now-bankrupt company controlled by Fioretti.
Documents indicate Fioretti allegedly misrepresented himself as an officer of First United MortgageBanc, CFI's mortgage unit, Williams said.
The investigation began in January after several mortgageholders complained they were being unfairly accused of not making their monthly payments.
In mid-February, the company hired Dick Price, a local licensed private investigator, to follow the paper trail from more than 20 customers who said their payments were not credited.
Price said more than $40,000 worth of checks made out to First United were deposited into accounts of FLAMG Mortgage Inc., a company owned by Fioretti. A photocopy of one check obtained by the Times was made out by a Dayton, Ohio, couple to First United for $669.48 and endorsed with a stamp on the back as payable for deposit only to FLAMG Mortgage.
FLAMG is under Chapter 11 bankruptcy protection from creditors.
Fioretti, who had been with CFI since June 2000, could not be reached for comment Tuesday.
Price said he and CFI executives contacted the FBI about four weeks ago and have had two meetings with federal investigators since. He would not discuss the status of the investigation. An FBI official familiar with the case could not be reached for comment.
In an SEC filing Monday, CFI said it would file its fourth-quarter results by April 15. Without being more specific, the company said it expects to report a reduction in net loss from operations for 2000 compared with 1999. The year 2000 was its first full year of activity since emerging from bankruptcy in 1999.
In the third quarter of 2000, the company reported its first profitable quarter since going public in 1997. It made $167,760 for the quarter but lost $900,000 for the first nine months of the year.
The company has tried to morph beyond a mortgage lender in the past two years, moving into the software development business. In January, it bought Surfside Software Systems, supporting a line of software products used in taxi, limousine, intermodal freight and other transportation businesses.
- Jeff Harrington can be reached at firstname.lastname@example.org or (813) 226-3407.
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