Convicted Sticky-Fingered Escrow Agent Who Used Check-Kiting Scheme To Pocket $1.5M Among Three Tagged w/ Administrative Charges By Minn. Regulator

From the Minnesota Department of Commerce:

• The Minnesota Department of Commerce is continuing its crackdown on title insurance companies and mortgage originators in the state for allegedly misappropriating funds, charging fees for services not rendered, paying illegal rebates and misleading both lenders and borrowers in order to drum up business. Commerce Commissioner Mike Rothman last week signed three separate enforcement actions against mortgage originators and title agencies for alleged abuses and violations of Minnesota law.

The Commerce Department describes one administrative action against an allegedly sticky-fingered real estate closing agent:

• The Department charged Linda Tuttle-Olson, owner of Albert Lea Abstract Co. (aka Freeborn County Abstract Co.), with allegedly misappropriating about $1.5 million in client funds. Tuttle-Olson allegedly used a portion of the misappropriated funds for her own use, spending large amounts gambling at the casino.
• The department's investigation, which began in May 2010, found that in at least 37 cases, Tuttle-Olson misappropriated funds from escrow accounts and moved them to other bank accounts and to herself by "kiting" checks and issuing checks on accounts without sufficient funds. Check kiting is a systematic pattern of depositing non-sufficient funds (NSF) checks between two or more banks, resulting in the books and records of those banks showing inflated balances that allow NSF checks to be honored rather than returned unpaid. Examples of Tuttle-Olson's check kiting scheme can be found in the department's statement of charges.
• A prehearing conference will be held Thursday, June 16 at the Office of Administrative Hearings in St. Paul. Tuttle-Olson and her company may be subject to a fine of up to $10,000 per violation.
• Tuttle Olson pleaded guilty to wire fraud last week in U.S. District Court. She faces up to 20 years in federal prison. The federal case was built on the Department of Commerce's investigation.

For more, see Check Kiting, Operating a Bait-and-Switch Scheme and Paying Illegal Rebates, Kickbacks Among List of Charges.