The state Department of Economic and Community Development awarded Hybrid Insurance Group a $500,000 loan in August to create jobs, according to documents released this afternoon at the Courant’s request.
But Hybrid CEO Earl O’Garro Jr., who received $250,000 as a first installment, defaulted on the loan and now owes the state $264,528.01, those documents show.
O’Garro signed the loan agreement with the state just weeks after a July wire transfer from the city treasurer’s office that has come under scrutiny.
A federal grand jury is investigating O’Garro over the disappearance of $670,000 in premium payments that were supposed to go to two of the city’s insurance carriers. City Treasurer Adam Cloud’s office wired the money directly to Hybrid on July 18, but the payments never got to carriers Starr Indemnity and National Casualty, who provide the city’s excess liability coverage.
City and school finance officials became aware of the missing premium payments in early September, according to emails obtained through the Freedom of Information Act. John Griffin, the risk manager for the city and school system, soon filed a complaint against Hybrid and O’Garro with the Connecticut Insurance Department.
As we’ve reported, the insurance regulator filed an 11-count complaint against O’Garro and Hybrid in October, and last month revoked their licenses to conduct insurance business in the state.
Cloud has been scrutinized for a possible conflict of interest with O’Garro.
In early 2012, O’Garro received a $100,000 loan and $26,320 matching grant through the state’s Small Business Express program to help relocate Hybrid’s headquarters from Windsor to 30 Lewis Street in Hartford, a building owned by Cloud, his brother Christopher and their father, former state legislator Sanford Cloud Jr.
Around the time of that first state loan, which O’Garro has since defaulted on, Hybrid became the broker of a liability policy for the city’s pension commission. Adam Cloud has stated that he recommended Hybrid and agent Wentworth, DeAngelis and Kaufman to the commission.
The $500,000 loan agreement from August called for Hybrid to create 30 full-time jobs at an average salary of $50,750, as well as retaining 12 jobs. Only after Hybrid established 15 new jobs would it receive the second installment of $250,000, which apparently never happened.
Combined, O’Garro owes at least $369,000 to the state. View the latest default letter here.
Christopher Cloud, Adam’s brother, is registered with the state as a lobbyist for Hybrid.
Check Courant.com for updates.