Minn. Regulator Files Suit Against Closing Agent Accused Of Pocketing Payoff Proceeds In Alleged $1.1M+ Escrow Swindle; Criminal Charges Under Review

In Forest Lake, Minnesota, the Star Tribune reports:

• A Forest Lake real estate closer is accused of pocketing more than $1.1 million from dozens of real estate transactions in the Twin Cities area by failing to pay off original mortgages or pay forward numerous transaction-related fees. Two of the properties were being bought by the city of Forest Lake, which lost more than $205,000. Many of the cases involved hundreds or thousands of dollars but the largest, at $594,000, involved a bank that said funds given to the closer, a company owned by Cynthia T. Strand, were not used to pay off the first mortgage on the property.

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• According to the 14 counts of civil charges filed by the Commerce Department, Strand Closing Services in Forest Lake took in money that was meant to pay off mortgages and related fees but failed to pass it along in at least 42 instances. Her title insurance, real-estate closer and notary licenses have been revoked and she may face a civil penalty.(1)

• Washington County Attorney Doug Johnson said the Commerce Department has referred the case to his office to review for possible criminal charges. "We're in the middle of looking at it," he said, declining to speculate on whether criminal charges would be filed.(2)

For the story, see Forest Lake closing firm accused of pocketing cash (State officials say the fraud scheme involved the company not paying off mortgages).

(1) Strand is also accused of failing to record title changes in several cases, failing to remit title insurance premiums, using fraudulent practices and demonstrating financial irresponsibility, the story states.

(2) Any person who has lost money due to the fraudulent, deceptive or dishonest practicesof, or conversion of trust funds by, a Minnesota-licensed closing agent, real estate broker, or real estate salesperson should contact the Minnesota Department of Commerce's Real Estate Education, Research and Recovery Fund for information on recovery of some or all of the monetary losses suffered.