NORTH MYRTLE BEACH — A bank has filed a foreclosure lawsuit against Harry Edward “Howie” Lavin III – the former automobile dealer now at the center of an alleged multi-million dollar check-kiting investigation – for failing to make payments on his condominium at the Edgewater at Barefoot Resort development here.
JP Morgan Chase bank filed the lawsuit Monday, claiming Lavin has failed to make any payments on the condominium since May. That is the same month that CresCom Bank in Myrtle Beach seized all of the automobiles at the Lavin Sales dealership and froze Lavin’s bank account, alleging that Lavin had orchestrated a nearly decade-long check-kiting scheme that could cost the bank up to $4.5 million.
CresCom and Carolina Trust Federal Credit Union, the other financial institution involved in the alleged scheme, are investigating how the losses occurred and why it took so long to detect them. A criminal investigation also is under way, according to Lavin’s lawyer.
JP Morgan Chase said in its foreclosure lawsuit that Lavin owes $179,650 in principal plus 5.25 percent annual interest on the loan.
In addition, Lavin used the condo as collateral for a $100,397 loan from CresCom, according to the lawsuit. CresCom has not taken any legal action on that loan, according to court records.
JP Morgan Chase wants a judge to declare its mortgage a first lien on the property so it can proceed with foreclosure. No court date has been scheduled in the case.
Horry County property records show Lavin and his wife bought the condo from Centex Homes for $299,900 in April 2008.
In addition to the check-kiting charges, Lavin and his brother, John, are facing a pair of pending lawsuits related to the failed automobile dealership. CresCom claims in one lawsuit that the two men have not repaid $3.1 million in loans while a group of investors in the dealership claim in a separate lawsuit that they are owed $365,000. Both lawsuits are pending.
Howie Lavin also is facing a worthless check charge in criminal court. That charge is related to $20,000 check he wrote to an auto parts store just as his CresCom account was frozen.
Check kiting is an illegal scheme in which a person tries to take advantage of the lag time between when a check is deposited and when it clears. That lag time allows the person to create a false line of credit that is based on non-existent money. Check kiting schemes require at least two bank accounts and two or more banks, with worthless checks circulating back and forth between the accounts. Most banks now have computer software that can quickly detect potential check kiting.
Lavin Sales, which was located on Jason Boulevard in Myrtle Beach, was an independent dealership that sold only used vehicles. Dealership founder Harry Lavin, who had sold automobiles for others for more than 25 years before opening his own dealership in 1987, died in 2010.
Contact DAVID WREN at 626-0281.