02/28/2009

News / PASADENA TITLE COMPANY OWNER INDICTED FOR ALLEGEDLY DEFRAUDING LENDERS OF OVER $3.4 MILLION

Diverted Real Estate Proceeds to Personal Use and Created False Settlement Documents





Baltimore, Maryland - A federal grand jury indicted title company owner Deborah Williams, age 56, of Pasadena, Maryland, today for mail fraud related to a scheme to divert settlement funds to her own benefit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

“Mortgage lenders and borrowers depend on title companies to use loan proceeds to repay outstanding mortgages and other debts,” said U.S. Attorney Rod J. Rosenstein. “Maryland’s Mortgage Fraud Task Force will pursue criminals who rip off lenders and borrowers, and we will seize and forfeit their criminal proceeds.”

According to the 15 count indictment, Williams was the sole officer and director of Day Title, Incorporated, a title company with offices in Severna Park, Maryland, that conducted residential and commercial real estate closings and issued title insurance policies. The indictment alleges that from April 14, 2005 until May 8, 2008, Deborah Williams used for her own benefit settlement funds from real estate closings that were deposited in Day Title’s escrow account and were intended to pay off the lien holders on those properties. Williams attempted to conceal her illegal transactions by falsely representing on the settlement documents that her company had paid off lien holders, then sent the falsified settlement documents to the lender by commercial carrier. In fact, Williams either initiated stop payments of payoff checks that had been disbursed or intentionally failed to mail the payoff checks to the lien holder.

According to the indictment, Day Title’s failure to make the pay offs to the lien holders was not detected until sellers began receiving delinquency notices from their mortgage companies. The time delay between the settlement and the date when Day Title made the pay offs to the lien holders allowed Williams to replenish the escrow account with proceeds from new real estate settlements. The indictment seeks forfeiture of $3.4 million, the amount Williams allegedly failed to pay to the lenders.

Williams faces a maximum sentence of 20 years in prison on each of the 15 counts and is scheduled to have her initial appearance in federal district court in Baltimore at 10:00 a.m. on Friday, February 27, 2009.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation for its investigative work and expressed his appreciation to Maryland Insurance Commissioner Ralph S. Tyler for the assistance provided by the Maryland Insurance Administration. Mr. Rosenstein commended Assistant United States Attorney Stephen M. Schenning, who is prosecuting the case.

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