Orlando Sentinel
R-G Crown sorts out mess over developer
The Casselberry-based thrift lent millions to Barrington Homes' would-be home buyers.http://www.dc.state.fl.us/ActiveOffenders/ -- a recent search using Barrington's name turned up 11 aliases and several felony convictions for grand theft and forgery.

Richard Burnett
Sentinel Staff Writer
May 23, 2006

R-G Crown Bank, one of the region's fastest-growing financial institutions, has become ensnared by the problems of an Orlando home-building company whose former chief executive faces money-laundering charges.

The Casselberry-based thrift has loaned millions of dollars during the past year to would-be home buyers who hired Barrington Homes Inc. to build houses for them in three subdivisions the company was developing in the Apopka area.

But as John E. Barrington sits in Seminole County Jail following his May 3 arrest on federal charges, his subdivisions also sit empty, even though dozens of people have paid him hundreds of thousands of dollars -- much of it loan money disbursed by Casselberry-based R-G Crown.

The would-be homeowners are now questioning R-G Crown's role in the strange case of Barrington, a convicted felon who four years ago legally changed his name from John Stuart Jakows. Jakows has a lengthy arrest record, including charges of mortgage fraud, forgery and grand theft.

It is not clear how the home builder's criminal background escaped the bank's attention, or why R-G Crown released construction funds to him when no progress was being made on the three subdivisions, known as Paradiso Park, Promise Park and Meadow Woods.

"You would think there was some kind of breakdown in the loan-administration process, to let things get to the place where they are now," said Rod Jones, a former state banking regulator who is now a partner in the Shutts & Bowen law firm in Orlando.

R-G Crown officials deny any such breakdown took place. They acknowledge missing Barrington/Jakows' rap sheet but said the subdivision loans had been reviewed and administered appropriately.

The loan disbursements made to Barrington were required by the contracts the home buyers had signed with the builder, said Rolando Rodriguez, R-G Crown's president. The thrift was simply complying with those terms, he said.

"We did full due diligence on this matter, as is our normal practice," said Rodriguez, who joined R-G Crown in January. "It was the name change [from Jakows to Barrington] that has thrown everyone off."

Industry experts said banks do not routinely run criminal-background checks on customers or developers. But it is not difficult to do. Using a Florida Department of Corrections Web site, for example --

There also should have been plenty of red flags on Barrington's credit file, which banks routinely examine before making a loan, said James Gilkeson, a former federal banking regulator who is now a finance professor at the University of Central Florida.

"It sounds to me like they messed up big time," he said. "They bit into this about as much as the homeowners did."

Rodriguez noted that R-G Crown -- a subsidiary of R&G Financial Corp. in San Juan, Puerto Rico -- is not the only bank with Barrington-related loans. Fewer than half of the 50 home buyers involved in the Apopka subdivisions had loans with R-G, he said.

The federal Office of Thrift Supervision, R-G Crown's primary government regulator, would not comment on the Barrington matter. And Rodriguez would not say whether banking regulators have questioned R-G Crown about it.

He did say that nobody has been fired because of the situation, but the bank has assigned a new team to Barrington-related loans.

Although the loans involve millions of dollars, the Barrington matter is little more than a blip on R-G Crown's overall financials. The thrift had almost $2.4 billion in loans and leases at the end of 2005, according to figures from the Federal Deposit Insurance Corp.

Still, it's an embarrassing incident for Central Florida's 11th-largest financial institution, which now has $3 billion in assets.

The would-be homeowners said that, since Rodriguez took over in January, R-G Crown has been more responsive. He has met with some of them and has promised that R-G would try to help, said Jason Wells of Orlando, who borrowed more than $350,000 to build a home in Paradiso Park.

"We do feel R-G has a lot of responsibility for what has happened," he said. "But the bank president has been great. It's a completely different experience for us since he's been there. Before, a lot of times nobody would even answer the phone when we called."

Citing an ongoing lawsuit against Barrington, Rodriguez would not comment further on the builder. R-G Crown filed a foreclosure suit in March in state Circuit Court in Orlando against the builder and Barrington Homes, targeting the company's headquarters at 5858 Lakehurst Drive.

According to court records, Barrington bought the building in 2003 from Barakat International Inc., the real-estate holding firm of the late Jesse Maali, the former International Drive retail magnate. Barrington assumed the building's mortgage, which was held by R-G.

R-G's suit states that Barrington defaulted on the loan earlier this year and owes the bank more than $850,000, including penalties and interest. Barrington has not responded to the suit, and the court clerk's office has entered a default judgment against him.

Two Barrington subcontractors, Premier Paving & Construction Corp. and Rinker Materials Inc., say they are owed more than $170,000 for road work done in the Apopka subdivisions. They have each filed foreclosure suits against some of the home buyers.

R-G Crown has promised the Apopka home buyers that it will contest the subcontractors' claims, said Justin Cirillo of Leesburg, who borrowed money to build in Paradiso Park.

"The bank has been very cooperative in meeting with us, but they haven't actually done anything yet," he said. "We hope they'll be able to get another builder in there to get the work done, but they say they can't do anything until they get their arms around the situation."

Richard Burnett can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 407-420-5256.