Richard C. Roney, Jr., 46, former title company owner, Laurel Springs, New Jersey, was charged by information with four counts of wire fraud related to an alleged scheme that cost lenders more than $750,000 and involved escrow theft.
Escrow theft, also known in the industry as escrow defalcation, causes significant and immediate losses to homeowners and lenders. On June 4, 2012, Demotech published a study on this form of fraud entitled Escrow Theft: Today’s Challenge in Title Insurance. The Study examined the relationship between strong state regulations and escrow theft and concluded, unsurprisingly, that when states that adopted strong licensing requirements, strict oversight and financial responsibility regulations regarding escrow agents, escrow theft loss ratios were lower.
Roney was the owner of a title company called Park Avenue Abstract, Inc., based in Somerdale, New Jersey, which served as the title company on home mortgage transactions. According to the information, between June 2009 and April 2013, Roney unlawfully withdrew money from his company’s escrow accounts for his personal use and to pay for Park Avenue Abstract’s operating expenses, instead of using that money to close the mortgage transactions.
It is further alleged that while Roney returned much of the money, his misuse of Park Avenue Abstract escrow account funds prevented Park Avenue Abstract from timely satisfying outstanding first mortgages, which ultimately caused lenders to sustain actual losses of over $750,000.
Roney faces a likely advisory sentencing guideline sentence of 27-33 months, as well as a $4,000,000 fine, a $400 special assessment, and full restitution of as much as $751,750.
The case was investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.