The former co-owner of a title company based in the Twin Cities was sentenced for white collar crime of fraud relating to mortgage transactions last Wednesday. The former title company co-owner and attorney was sentenced to two years in federal prison for committing $5.3 million in fraud related to 3,000 mortgage transactions. The money collected in the fraudulent mortgage transactions were used to pad the title company co-owner’s salary and to cover expenses of the business.
The 42-year-old lawyer owned a title company and became an agent of Ticor Title Insurance Company in 2001. Ticor Title is an underwriter service based in Florida and is a subsidiary of Fidelity National Financial and United General Title Insurance Company.
Between June 2005 and August 2007, the 42-year-old and his partner, who is also an attorney, misused money collected for insurance premiums, title search costs and recordings fees. The pair spent the money on salaries and business expenses. According to federal prosecutors the two business partners made over $300,000 per year from the title company business.
An investigation of the lawyer’s title company business lead to the revocation of both partners’ title agency licenses. A civil penalty of $2 million was also handed to both partners.
According to a federal prosecutor on the case, the fraud cost Ticor and Fidelity over $4.1 million. The insurance companies took the losses and provided new insurance policies to the affected policyholders.
The 42-year-old will have to serve three years of supervised release after his prison sentence and will have to pay back more than $5 million.
Source: Star Tribune, “Lawyer gets 2 years for fraud,” Dan Browning, 7/7/11
