MuskogeePhoenix.com, Muskogee, OK

November 17, 2012

Lawyer who found $60,000 for county gets new contract

By D.E. Smoot
Phoenix Staff Writer

— A nine-month search for money hidden in dormant accounts at banks that held deposits for the Muskogee County Home Finance Authority turned up more than $60,000.  

Glenn Floyd, a Norman lawyer who has represented the county on various projects since 1968, delivered a check Tuesday to county commissioners. His law firm will keep 25 percent of the recovered proceeds. That’s about $15,000.

Because Floyd’s first search proved successful, commissioners executed a second contract with his firm to search for funds from a similar program that might have “fallen through the cracks.”

Commissioners approved the initial contract in February with Floyd’s law firm, which launched a nationwide search for surplus funds paid by first-time homeowners who benefited from a 1978 housing program.

Floyd said the funds recovered consisted of deposits that “have been passed around” from bank to bank during the past few years. He likened the task of tracking those deposits to a treasure hunt.

“These bond issues have a tendency to fall through the cracks,” Floyd said. “We pride ourselves on staying with those and just hope we live long enough to recover those surplus funds.”

Commission Chairman Gene Wallace, District 1, said any surplus money would have come about from federal and state housing programs initiated during the 1960s and ’70s. Through those programs, money was made available as incentives for first-time homebuyers.

Floyd said those programs were funded through the issuance of two bonds worth about $20 million. The programs provided the return of the 1.5 percent difference between the bond rate and the homebuyers’ mortgage rates be returned to the county.

Although most of the county’s money had been recouped, some proceeds got lost as the deposits were transferred from one financial institution to another. These are the proceeds Floyd’s firm was able to track down and recover.

Wallace said a similar discovery was made six or seven years ago, when a bond house in New York reported surplus funds totaling about $33,000 in its accounts. Because banks have no legal duty to disclose excess funds, it falls upon the county or its agents to initiate a search.

Floyd said the search his firm will initiate under this second contract may prove less successful. The program through which the proceeds may have accumulated, he said, was less successful than the housing programs from which the surplus funds recovered this year were generated.

“Muskogee County may have no residual funds in this program,” said Floyd, who would be paid a percentage of any money recovered.

The contract with Floyd Law Firm will expire a year after it is executed.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.