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Chicago Title Loses Civil Fraud Case, Must Pay Millions in Damages
   

Chicago Title, a subsidiary of Fidelity National Financial, was ordered to pay $5.7 million in punitive damages in a civil fraud case related to a massive mortgage fraud scheme in San Diego, California that resulted in over $30 million in losses. 

A jury determined on Tuesday that Chicago Title employees participated in a massive fraud scheme masterminded by Rollo "Rick" Norton.  Norton, a financial planner from Ramona, California, allegedly swindled hundreds of clients, and pleaded guilty to fraud in 2007 in relation to a scheme involving a San Diego condo complex in which Norton obtained fraudulent loans on individual condos by using the financial credentials of his investors without their knowledge. Between 2001 and 2005, Norton and others participating in the scheme obtained over 100 fraudulent loans.

But according to investors-- and Norton, who testified in the civil fraud trial-- Norton and his co-conspirators had help from several Chicago Title employees who handled closings for his illegal transactions and prepared fraudulent documents for Norton. 

Civil lawsuits have fingered Chicago Title employees in the creation of hundreds of fraudulent documents, and claimed that Chicago Title employees were present when Norton forged the signatures of his investors on the documents.  Chicago Title employees also allegedly arranged fund transfers designed to deceive lenders into believing that down payments were being made, when in fact this was not the case.    Norton testified that the Chicago Title employees knew that what they were doing was wrong.

Among the Chicago Title employees implicated in Norton's scam were executives Michael Godwin and Craig Gainor and escrow officer Zuzzette Nieto.  The lawsuit that was decided this week was only one of several similar lawsuits against Chicago Title filed by Norton's victims, claiming malfeasance by Godwin, Gainor, Nieto, and others.  Some of the lawsuits have been settled by Chicago Title.

Chicago Title was also found responsible for additional compensatory damages of up to $1.1 million to the group of 19 victims who brought the lawsuit. 

Chicago Title has refused comment on the jury award, stating that it considered the case to be an ongoing legal matter.



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