To the Republic National Bank of Miami, the loan seemed sound: an $800,000 mortgage on a Coral Gables, Fla., home worth $1.2 million. But the U.S. ! Attorney seized the house in March because it was owned by Thule Holding Corp., a Panamanian company controlled by Indalecio Iglesias, a convicted drug trafficker.
Federal law generally requires the Government to pay off mortgages on property it seizes. This time, though, the U.S. Attorney sold the house and refused to give Republic National the proceeds, claiming that the institution knew it was dealing with a drug trafficker when it approved the mortgage in...
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