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Saturday, November 9, 2013

Huntington, Ohio says former manager stole $2.7 million

Huntington National Bank accuses a former manager of stealing $2.7 million by diverting bank funds to his Chillicothe property-management company.

Joseph P. Molnar, 49, stole the funds between late 2008 and mid-2012 while helping to manage a Huntington subsidiary, the Columbus-based bank claimed in a lawsuit filed in U.S. District Court in Columbus.

The lawsuit accuses Molnar and unidentified parties of engaging in a racketeering scheme to divert money owed to Huntington to J. Property Management, a company owned by Molnar.

Molnar owns property in downtown Chillicothe and has been active in efforts to redevelop the community, including the landmark Carlisle Building damaged by a fire set by an arsonist in 2003.

U.S. District Court Judge Algenon Marbley is scheduled to conduct a Nov. 14 hearing on Huntington’s request for a preliminary injunction to prevent Molnar and others from transferring or spending any Huntington money.

The lawsuit, which seeks the return of $2.7 million and damages, claims that Molnar admitted on Oct. 31 to diverting money owed to Huntington into the bank account of his company. The bank filed the lawsuit the same day.

Molnar did not respond today to a message seeking comment. He has not filed a response to the lawsuit or identified a lawyer to represent him.

The lawsuit alleges the diversions occurred while Molnar helped manage the investments of Huntington Community Development Corp., a subsidiary that invests in low-income housing and other projects that yield tax credits for the bank.

Huntington accuses Molnar of diverting “development advisory fees” paid by developers to cover the costs of managing the subsidiary’s investments.

The lawsuit says that Huntington did not discover the “ongoing fraud” until September. No customers lost money as a result of the alleged scheme, said Huntington spokeswoman Maureen Brown.

No criminal charges have been filed against Molnar. A spokesman for the U.S. attorney's office said it could not comment. "We referred the issue to the appropriate law-enforcement officials and expect prosecution to the fullest extent of the law," Brown said.

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