Man Sentenced for Role in $800,000 Title Scam

Allison Tussey —  October 7, 2010 — Leave a comment

Dale Charles Dodge, Jr., 61, Alexandria, Minnesota, was sentenced by United States District Court Judge Joan N. Ericksen in federal court on charges connected to a scheme to defraud mortgage lenders and others out of more than $800,000. Dodge received 34 months in prison on one count of wire fraud and one count of engaging in a monetary transaction with property derived from unlawful activity, commonly referred to as money laundering. Dodge was indicted on September 15, 2009, and pleaded guilty on May 12, 2010.

In his plea agreement, Dodge admitted that from 2002 through 2005, he operated a title closing company under the names Premier Title & Abstract, Inc., and Verity Title & Abstract. As part of that operation, he maintained an escrow account, into which mortgage lenders regularly deposited loan proceeds for distribution at closings pursuant to the terms of the real estate agreements. He also contracted the services of a title insurer, who underwrote most of the real estate transactions closed through his company. Title insurers, often called underwriters, are liable to lenders, borrowers, and others if escrow and other transaction funds are improperly disbursed.

The plea agreement goes on to state that between 2002 and 2005, Dodge executed a scheme to defraud mortgage lenders and others out of large sums of money by diverting loan proceeds from the escrow account at his title company. The money was used for his personal benefit as well as the benefit of his company and others involved in the scheme. Specifically, Dodge fraudulently removed the funds or caused the funds to be removed from the escrow account to pay his salary and the salaries of company employees in addition to other non-escrow business expenses. Frequently, those expenses were paid through wire transfers from the escrow account to other accounts under Dodge‘s control. Furthermore, Dodge admitted concealing those actions from his title insurer and mortgage lenders as well as from property sellers and purchasers. Dodge‘s fraud scheme caused losses of more than $800,000. Approximately $844.561.60 is owed to one specific mortgage lender, who mistakenly deposited money into Dodge‘s escrow account. An additional amount is owed to First American Title Insurance Company, Dodge‘s title insurer, which was required under law to pay certain outstanding escrow obligations for which Dodge was unable to pay.

Following the sentencing, Jose M. Martinez, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division’s St. Paul Field Office, said, “By taking deliberate steps to divert escrow monies and conceal these actions from others in the real estate and mortgage industries, Mr. Dodge committed mortgage fraud. This sentencing shows that this type of activity can have criminal consequences including a felony conviction and a prison term to serve.”

This case was the result of an investigation by the IRS-Criminal Investigation Division, the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Tracy L. Perzel.

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Allison Tussey

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