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Home > Blogs > Butler County News and Issues > Archives > 2009 > October > 12 > Entry
GOP chairman settles fraud suit brought by brother
Butler County GOP Chairman Tom Ellis and his brother quietly settled a lawsuit last week that claimed the Republican leader defrauded his mother and brother out of more than $500,000.
The suit, brought by Stephen Ellis in June, was dismissed Thursday, Oct. 8, after a pretrial hearing with Common Pleas Judge Matthew Crehan, according to court records.
When called, Stephen Ellis said the suit was settled out of court. But he would not discuss the terms of the settlement.
“According to the settlement, we’re not allowed to really disclose very much other than it was settled,” he said.
“We resolved it in the way that it should have been resolved in the first place, and not publicly,” Tom Ellis said. “We’re not going to go into any of the details.”
Tom Ellis continues to deny the allegations made by his brother. “There was absolutely no truth to any of that,” he said.
Those allegations were that Ellis sold a 20-unit apartment complex in Seven Mile to his mother at a loss, then mismanaged the property and pocketed some of the rent. It also claimed Ellis borrowed money from his mother and never paid it back.
The suit alleged fraud and breach of contract, seeking the full amount of allegedly misappropriated funds and clear title to the apartment complex.
The suit said Tom Ellis sold the Seven Mile Apartments to his mother for nearly $1.4 million, which was more than the property was worth, and made $251,000 in the deal. He then managed the property, misappropriated much of the rent proceeds and borrowed more than $251,464 from his mother and brother to keep the property out of foreclosure, the suit alleged.
The suit claimed that Ellis did not deposit rental checks for five months over a one-year period, and $68,494 in rent proceeds are unaccounted for.
“The monthly shortfalls were caused in part by Defendant Tom Ellis’s practice of keeping or diverting a portion of the rent income from the Seven Mile Apartments to the Defendants’ personal use and benefit,” the suit said.
The suit said the apartment complex operated at a loss of more than $24,000 per year, which Ellis wrote off on his taxes though his mother owned the property.
He then coerced his mother to revoke the power of attorney his brother held over her and sell the property back to him in May for $100,000, leaving her on the hook for $1.15 million, the suit claimed.
The suit also claimed Ellis bought a condominium in Wayne Twp. from his mother for $87,900, paid her $58,462, borrowed that full amount from her, then transferred the property back into her name.
The suit also claimed Ellis borrowed $57,556 from his mother in short term loans and never paid it back.
Permalink | Comments (4) | Post your comment | Categories: Republican Party
Comments
By middie majik
October 12, 2009 5:37 PM | Link to this
Talk about airing dirty laundry! Wow….what a mess but the one who loses is the mother. The brothers probably deserve the headaches they are giving each other!
By greatly concerned
October 13, 2009 6:59 AM | Link to this
Qualification necessary for leadership in the Butler County GOP: Possess the morals, ethics, greed and total disregard of the law and tax codes that would allow one to defraud their own mother. Candidates displaying these qualities will shine in Butler County. This settlement (and its investigation) sounds like an IRS wet dream waiting to happen. Somebody is not paying their fair share of taxes in this story.
By red sailor
October 13, 2009 5:52 PM | Link to this
Can we please bring back tar and feathering.
By John Bohner
October 14, 2009 7:48 AM | Link to this
Listen folks, it’s time to get rid of the Ellis guy. We look bad enough to the public with our handling of the health care issue. Don’t tell anyone I’ve received over 1.4 million from the health insurance folks