Title Agent Cops Plea To Illegally Dipping Into Escrow Funds From Real Estate Closings; "Katrina" Credited For Slamming Brakes On Ponzi-Style Scam

In New Orleans, Louisiana, the Times Picayune reports:

• A 68-year-old Metairie man pleaded guilty Wednesday in federal court to wire fraud for his role in a local refinancing scheme, authorities said. Hubert Edward Ellzey Jr. acknowledged that, as an independent title agent for Commonwealth Land Title Insurance Company of Louisiana, he wired money from the refinanced properties to a special escrow fund, court records show. He dipped into this account and used the money for personal use [...], according to a news release from U.S. Attorney Jim Letten's office. Ellzey also used the company money from future home closings to pay off some of the previous loans he should have canceled.

• The scheme was unearthed shortly after Hurricane Katrina because all the closings came to a halt and Ellzey was unable to account for the money he had taken, Letten's office said. In all, Ellzey defrauded his employer of about $775,000. He is scheduled to be sentenced in January.

Source: Title agent pleads guilty to misusing money in wire fraud case. EscrowRipOffKappa