Former Title Business Owner Jailed for Misappropriating Client Funds


FOR IMMEDIATE RELEASE:
August 5, 1999

Attorney General J. Joseph Curran, Jr., announced today that the former operator of Landmark Title Company in Reisterstown was sentenced to serve 90 days in jail today after he pleaded guilty to charges of embezzling approximately $120,000 in customer escrow funds. Steven L. Friedman, 53, of Reisterstown, pleaded guilty in July of 1999. Today he was sentenced by Baltimore Circuit Court Judge J. Norris Byrnes to 3 years in prison, with all but 90 days suspended, and five years probation. Judge Byrnes also ordered Friedman to make restitution in the amount of $119, 283 to Old Republic Title Insurance Company. The judge further ordered that Friedman be barred from acting as an escrow agent or a fiduciary of any type during his period of probation.

According to the statement of facts presented during Friedmanís guilty plea, Friedman, a licensed title agent, operated Landmark out of a Reisterstown office. Through a series of transactions, he illegally transferred $119,283.12 in real estate settlement funds from Landmark's escrow accounts to its operating accounts. The money was then spent on a variety of business and personal expenses including payroll expenses and the repayment of loans - including loans may to Landmark by Friedman and his brother.

By law, none of this was Friedman's money, but belonged to Landmark's settlement customers who entrusted their funds to Landmark to pay costs associated with purchasing a home, such as paying off prior mortgages on the property, paying the seller, and paying costs associated with recording a new deed. Additionally, the investigation revealed that Landmark routinely failed to pay its title insurance premiums even though it collected premiums from its customers. Landmark also failed to record lien releases for mortgages that were paid off, despite the fact that it charged customers a lien release service charge and collected money from customers to pay the release fees charged by county clerks

"By taking these funds for his own use, Mr. Friedman put his business and his customers in potential jeopardy," said Attorney General Curran. "These funds are meant to be untouchable - yet Friedman had his hands all over them."

The case was investigated and prosecuted by the Attorney General's Criminal Investigations Division with investigative assistance from Insurance Fraud Division of the Maryland Insurance Administration. The Insurance Fraud Division, which is staffed by investigators from the Insurance Administration, troopers from the State Police and prosecutors from the Attorney General's Office, is a unit responsible for investigating fraudulent insurance acts in this State, including theft of premiums by insurance agents.


For Further Information Contact:
Frank Mann
Special Assistant to the Attorney General
(410) 576-6357