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Source of Title Blog

A Few Simple Rules
by Robert Franco | 2008/01/24 |

If there is one thing you can say about the criminals in the title industry, they are courteous (if not very bright). Take for example, Jarrell and Katherine Britts, formerly of Eagle Title and Abstract. They stole $7.7 million and just patiently waited at their home to be arrested. How nice of them.

Jarrell Britt, who was an officer with the Clearwater police department before entering the title business, started Eagle Title in 1993. At one time he employed 75 people and closed 100 transactions a day. But, like most criminals, that wasn't good enough. He wanted more.

He managed to steal $2.6 million from the company's escrow accounts before selling the company to First American for more than $3 million in 2004. He was retained as general manager after the sale and managed to skim off another $2.1 million. It wasn't until he violated his non-compete agreement with First American that he was placed on administrative leave, then resigned, and the audit was conducted that discovered the missing money.

He had managed to conceal his embezzlement by blaming short-falls on redundant, erroneous wire transfers. But, it was soon discovered that he had diverted the funds to other business interests and bought nice cars, a 37-foot boat, and a $1.6 million dollar home; a nice home, where they courteously waited to be arrested.

From this story, I thought it would be a good idea to review a few simple rules for owners' of title agencies:

RULE #1: DO NOT STEAL FROM YOUR ESCROW ACCOUNTS!! That money does not belong to you - it is your customers' money. This is really the most important rule, and if you follow it the rest of rules aren't really necessary.

So, do not steal from your escrow accounts, but if you do...

Source of Title Blog ::


RULE #2: DO NOT SELL THE COMPANY TO YOUR UNDERWRITER. Really... you would have to imagine that there would be some sort of audit. Contrary to popular belief, underwriters are not stupid (usually). Before they pay you millions of dollars for your company, they are probably going to conduct some investigation into your finances. As tempting as it may be to cash out - it would be a much better idea to politely decline the offer.

So, do not sell the company to your underwriter, but if you do...

RULE #3: DO NOT STEAL MORE MONEY. You are no longer the owner - the new owner might be a little more diligent in reconciling the books and you most likely will not get away with continuing to steal money from the escrow accounts.

So, do not steal more money, but if you do...

RULE #4: DO NOT VIOLATE THE TERMS OF THE SALE. As in this example, violating the non-compete clause will give rise to suspicions and it will attract more attention to the way you managed the company. Thus, there is even a higher probability that they will uncover the fact that you violated rules 1, 2, and 3.

So, do not violate the terms of the sale, but if you do...

RULE #5: DO NOT GO HOME. At this point, it is only a matter of time until they catch on to your crimes. They will come looking for you and the first place they look will be your home - do not be there. It is as simple as that - if you violated rules 1, 2, 3, and 4 and have not gotten caught, you have been extremely lucky. Go to Vegas - do not go home!

I really cannot fathom why someone with such a successful business would steal from their escrow accounts to begin with. For that matter, I cannot comprehend why anyone would attempt such a crime. But it happens more often than I ever would have imagined. If he had just operated honestly and ethically, he could have sold out for $3 million and eventually retired in peace.

Of course, you have to chuckle a bit by the antics of First American, who look more like the Keystone cops in this fiasco than a responsible underwriter. Not only did their agent get away with stealing millions of dollars from his escrow accounts, they paid him $3 million for the business and allowed him to steal a couple of million more as the general manager. Yikes! That must be a bit embarrassing.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com



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Categories: Crime, Defalcations, Ethics, Small Agents, Title Industry

985 words | 7354 views | 5 comments | log in or register to post a comment


Robert,
I had to chuckle...
Robert,
I had to chuckle at each step that you outlined, especially at the part of "but if you do". It really truly amazes me that these people really think they are not going to get caught at some point in time. I guess they couldn't sell off everything fast enough to get out of town.
 
by Jay Duncan | 2008/01/24 | log in or register to post a reply

It's both troubling and comical. Ho...
It's both troubling and comical. How dumb can you be. It's inevitable that checks will start to bounce.

 
by Shane Kane - TitleSuccess.com | 2008/01/24 | log in or register to post a reply

I can never understand why someone ...
I can never understand why someone thinks that they are going to get away with taking money from escrow funds. It is so easy to find when doing an audit. You may not get caught right away, but believe me you will get caught.  
by Wanda Steudel | 2008/01/24 | log in or register to post a reply

Good Stuff! Something this dumb you...
Good Stuff! Something this dumb you just have to laugh at. Thanks for the comic relief. 
by Greg Knowles | 2008/01/24 | log in or register to post a reply

I concur with all of our comments. ...
I concur with all of our comments. I could not fathom touching my escrow funds for personal reasons. We've all put way to much effort in maintaining our businesses without this type of worry. 
by Pamela Hime | 2008/01/28 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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