EAST ST. LOUIS – Assistant U.S. attorney Adam Hanna claims former felon Teresa Papolczy, who owes the government about $390,000 in restitution, bought a house in Greenville for $209,000 through fraud.
Hanna sued her in U.S. district court on Oct. 5, for declaratory judgment that she owns the property rather than the persons whose names appear on the title.
“Papolczy supplied the funds for the transaction but did not receive an interest in the property in exchange,” Hanna wrote.
He wrote that she intended to hinder, delay, or defraud the United States, and prevent it from recovering the funds in satisfaction of her restitution debt.
He wrote that she became insolvent as a result of the transfer.
Co-defendants include Charles Voss Jr. and Karen Waugh, whose names appear on the title.
In 2003, Papolczy pleaded guilty of making or using a false document knowing it contained a materially false, fictitious or fraudulent statement or entry.
St. Clair County Circuit Judge John O’Gara and State’s Attorney James Gomric, partners at the time, represented Papolczy.
Former district judge William Stiehl sentenced Papolczy to six months in prison and three years on supervised release.
He ordered restitution of $392,093.94.
This February, in her criminal case, Hanna applied for a writ of garnishment on Illinois Department of Human Services at Murray Center in Centralia.
He wrote that the balance due as of Feb. 1 was $391,893.94.
He wrote that demand was made upon Papolczy and she failed to satisfy the debt.
The court clerk issued notice to Papolczy in March, and the docket of her criminal case shows no further entries.
In the civil complaint, Hanna wrote that the United States began pursuing discovery of Papolczy’s financial circumstances early this year.
He wrote that the United States notified her that it would place her in an offset program and garnish her accounts and assets.
He wrote that on March 1, she bought four cashier’s checks from Regions Banks at $45,000 each and a fifth at $29,000.
He wrote that the checks were purchased with funds from a Regions Bank account of which Papolczy was a joint owner. On March 5, all five checks were presented at closing to purchase 1303 West Cloverfield in Greenville.
He requested judgment that title is vested in Papolczy.
He wrote that the balance due on Oct. 1 was $390,815.87, and that it accrues no interest.