Municipal Insurer Coughs Up $884K To Cover 90% Of County Employee/Bookkeeper's Theft In Foreclosure Surplus Snatching Scam

In Memphis, Tennessee, The Commercial Appeal reports:

• Shelby County government's insurance carrier has issued a check for $884,306 to cover about 90 percent of losses incurred in a Chancery Court embezzlement scheme. County Chief Administrative Officer Harvey Kennedy said Tuesday that Traveler's Insurance cut the check last week.



• "We've been paying premiums all these years. It's one of these things where you never expect to need it," Kennedy said.



• Former Chancery bookkeeper Brandon Gunn, 47, pleaded guilty in federal court last month to three counts of theft, conspiracy and money laundering in connection with a three-year scheme that tapped $1,063,903 from trust funds owed to Shelby Countians who lost homes in tax foreclosure sales. A second man, Correy Isom, 35, a Hickory Hill restaurant employee, also has been charged. Isom has pleaded not guilty and awaits trial.



• Although Gunn admitted to stealing more than $1 million, Kennedy said the "net theft'' amounted to $982,548 because Gunn repaid $81,355. That happened last spring when Gunn, still working for the county, funneled two large cashier's checks written under disguised names to the county after his bosses asked him to repay money.



• Following the payment from Traveler's, the county is left with $98,242 in losses resulting from the embezzlement scheme. "We will ultimately be responsible for that,'' Kennedy said. "The (former home) owners are entitled to that money."

Source: Insurer covers 90 percent of loss in Chancery Court embezzlement.