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Ex-Connecticut Lawmaker Took Improper Loans

From Tobacco Farm

By Dave Altimari, Hartford Courant
Published: February 5, 2016

A probate judge has ruled that a former state legislator "unjustly enriched" himself at the expense of his family's Enfield tobacco farm and that he owes his father's estate more than $2 million.

The harshly worded nine-page ruling by Judge O. James Purnell, issued Thursday, ends a contentious seven-year probate battle between Stephen Jarmoc and his sister, Laura. She filed a claim that her brother improperly used the farm as collateral to take out millions of dollars in loans to buy a Rhode Island vacation house and pay his children's private school tuition, among other personal expenses.

Purnell ruled that Stephen Jarmoc owes the estate at least $2.08 million and he ordered any mortgages, property transfers or loans made after Edwin Jarmoc's death in June 2009 to be voided.

The decision notes that 2002 and 2003 tax returns for the farm reveal that "without explanation or written agreement or vote" Stephen Jarmoc's percentage of profit from the farm increased in steps from 50 percent to 75 percent to 90 percent.

Stephen Jarmoc used the tobacco farm, which sells about $2 million annually in shade leaf tobacco to cigar companies all over the world, to take out a series of large loans, the judge said, that went to fund personal items for Stephen Jarmoc and his wife, Karen.

"Much of the money borrowed went to support the lavish lifestyle of Steven and Karen Jarmoc, their home, vacations, pension, tuition and a vacation home, none of which were income producing," Purnell wrote.

Stephen Jarmoc served in the 59th House District from 1992 to 2006 and was succeeded by his wife, who served until 2010 and is now president of the Connecticut Coalition Against Domestic Violence.

Stephen Jarmoc issued a statement through his attorney, Edward J. Heath of Robinson & Cole.

"I respectfully disagree with the decision. I am evaluating my options. My father and I ran the farm, my sister was not remotely involved from her home in New Hampshire. Her interpretation of what she is owed is inaccurate. It is unfortunate that I have had to work out this family matter in court," he said.

Laura Jarmoc is a doctor who lives in New Hampshire.

In court papers, Stephen Jarmoc argued that his sister did not object to the admission of Edwin Jarmoc's 2004 will until 15 months after it was submitted to the court.

Stephen Jarmoc was named executor of his father's will but he was removed by Purnell as the case unfolded. Purnell appointed attorney Paul Ridgeway of East Granby as the new executor of the estate.

Hartford attorney A. Paul Spinella, who represents Laura Jarmoc, said it has been a long fight for her.

"We think at long last justice has been done," Spinella said. "The fact remains that this case was a massive theft by a son of his father's estate."

Records show that at the time Edwin Jarmoc signed his will in 2004 he had $5 million in assets and $100 in debt. The current inventory of his estate shows assets of $2.8 million and debts to one bank - Farm Credit East - in excess of $7 million.

Purnell raised questions about some of the loans that Farm Credit gave to Stephen Jarmoc, particularly after Edwin Jarmoc died, indicating that the IRS, other relevant federal agencies and state officials may want to take a look at them.

"It is instructive that after Edwin's death, Farm Credit walked Steven through a process to set up a new LLC in order to get additional funds from the federal government that were not available to the business while the estate was being settled," Purnell wrote."There is serious question as to whether this was appropriate or even legal since it was nothing more than a shell corporation to funnel federal money to Jarmoc Tobacco."

Jarmoc Farm has been a staple in the Enfield area for nearly 100 years.

Edwin Jarmoc, who had advanced degrees in engineering and was a professor of engineering at Trinity College, ran the farm for years. Stephen and Laura Jarmoc grew up on the farm. While Edwin Jarmoc ran the operation, his wife, Eleanor, handled the books. When she died in 1998, Stephen Jarmoc and attorney Robert Berger took over the financial duties, records show.

Laura Jarmoc accused her brother of denying for years that their father suffered from dementia until the court ordered him to disclose their father's medical records. Those records showed that Edwin Jarmoc was diagnosed with dementia in November 2004, about four months after his new will was signed.

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