Tuesday, August 16, 2011

Title/Closing Lawyer Charged In $1M+ Escrow Funds Ripoff; Secretary's Threats To Reveal Boss' Bad Acts Leave Her In 'Extortion' Hot Water: Prosecutor

In Henrico County, Virginia, the Richmond Times Dispatch reports:
  • At 6 feet, 2 inches tall and weighing 290 pounds, William Orr Smith is hard to miss. His presence was a major factor in finding out what happened to more than $1 million in Bank of America mortgage and foreclosure funds that seemed to vanish in February.


  • Authorities say Smith, a longtime Henrico County lawyer who headed up a bank subsidiary, was especially knowledgeable about the missing funds for one simple reason: He took the money, they contend.


  • Nearing his 71st birthday, he now faces two embezzlement charges involving $1,065,227. The courtly lawyer made his first court appearance Thursday morning, and Henrico Circuit Judge Daniel T. Balfour set Sept. 28 as the day Smith will enter a plea in the case.

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  • Special Prosecutor Tracy Thorne-Begland said Smith is charged with basically operating a check-kiting scheme, handling mortgage and foreclosure proceedings with money that was intended to go elsewhere.

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  • Smith, [...] also helped lead Virginia State Bar investigators through details of the scheme; in June, Smith voluntarily surrendered his law license. State Bar documents show that Smith was the owner/operator of Montbrook Title LLC, a title insurance agency whose primary client in recent years was LandSafe Inc., a subsidiary of Bank of America.


  • "LandSafe hired Smith to conduct residential real estate settlements and foreclosures of homes with loans financed by Bank of America in Maryland and Virginia," according to the State Bar.


  • Audits discovered that Smith was not reconciling his escrow accounts, and Smith eventually told a State Corporation Commission investigator that his trust accounts were depleted and that some funds were missing.


  • "He explained that he was out of trust on all of his accounts and that he had been commingling funds from Virginia and Maryland transactions to cover shortages," according to a State Bar affidavit. Smith, the State Bar concluded, left only Bank of America with losses and reported his conduct to prosecutors.


  • But Smith, who had held his law license for 44 years, isn't the only person in his office under investigation. Thorne-Begland said Thursday that a secretary of Smith's faces a charge of extortion after threatening to go to authorities with information about Smith's dealings. Donna M. Allen, 37, who lives in rural Dinwiddie County, received about $20,000 from Smith during several months in 2010.

For the story, see Henrico lawyer, charged with embezzling $1 million, helped investigate his crimes.

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