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ORLANDO-The 21-month-old civil and criminal investigations of the defunct Evergreen Security Ltd. takes a new turn Nov. 4 when U.S. Bankruptcy Court Trustee R.W. “Bill” Cuthill Jr. outlines a tentative settlement he has made with the family of convicted conman William J. Zylka of New Vernon, N.J.

Cuthill will ask Bankruptcy Court Judge Arthur B. Briskman to approve a $189,000 settlement with the Zylka family while Zylka remains in a New York jail awaiting sentence for his part in allegedly stealing $27.7 million of the missing $214 million Evergreen took in from 2,203 global investors who thought they were putting their money into U.S. government mortgage-backed securities.

Zylka and his gang of lawyers, accountants and brokers are accused of pulling off the second largest scam in Florida history, next only to the 1985 ESM Government Securities Fund fraud that stole $315 million from institutions and government entities, according to Bankruptcy Court records.

Seventy-six brokers and 15 companies are being sued by Cuthill who at one time projected he would recover a total $25 million of the missing money. That figure has been lowered to about $2 million because most of the cash has been spent by the accused, real estate lawyers following the case tell GlobeSt.com on condition of anonymity. Cuthill represents the investors.

Zylka’s alleged theft of $27.7 million is the largest in the scheme, Cuthill will tell the judge. In the Zylka settlement, Barbara Zylka, the wife, would keep half the equity in the family’s 3.7-acre residence in New Vernon, NJ if it is sold. The property has been appraised at $1.2 million and is under contract for $1.1 million.

Zylka’s daughters would keep $600,000 from the sale of undeveloped land Zylka owns in Connecticut. The $600,000 is part of a trust Zylka set up before he bought into Everygreen in the 1990s, the judge will be told.

In other settlement deals posted in the court record, former Evergreen manager Robert W. Boyd, a lawyer from New Smyrna Beach, FL, 50 miles north of Downtown Orlando, has turned over $35,000 and two lots in North Carolina with an undetermined value. Boyd has been convicted of fraud charges and is awaiting sentencing.

Boyd and another former Evergreen associate, Thomas Coyle of Lakeland, FL are accused in Cuthill’s civil suit of stealing $34.2 million. Coyle has not been criminally charged.

Martin W. Boelens Jr., an Orlando lawyer and former Everygreen manager, paid the court $418,000. Boelens is accused of stealing $19.5 million. He has been convicted in Tampa, FL and New York courts and is awaiting sentencing.

Jeffrey A. Stanley of Orlando, a former Evergreen manager who has not been criminally accused, paid the court $7.500 in a civil lawsuit settlement. That pending suit alleges Boelens, Stanley and William H. Blankenship of Orlando bilked Evergreen out of $8.3 million in brokerage fees when their jointly owned company managed Evergreen.

Thomas Spencer of Orlando, a former salesman of wholesale insurance investment products, paid the court $100,000 and turned over a vacation home in Black Mountain, NC to settle a civil suit filed by Cuthill. The residence is appraised for $1.2 million but is under contract to be sold at $700,000, the judge will be told. Spencer pleaded guilty to federal fraud charges in April and is awaiting sentencing.

All of the accused, except Boyd who does not own a residence, were allowed to keep their homes under Florida bankruptcy liquidation laws.

The $214 million fraud unraveled when Boelens voluntarily placed Evergreen into Chapter 11 under the U.S. Bankruptcy Code on Jan. 1, 2001. Boelens managed Evergree for the last five years of its existence, court records show.

The Boston-based Evergreen Investments family of mutual funds, owned by Wachovia Corp. of Winston-Salem, NC, is not associated or related to Evergreen Security Ltd.

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