Monday, November 30, 2015

Illinois Jury Hammers Sticky-Fingered Real Estate Broker For Swiping $239K In Client Cash From Brokerage Escrow Account

In DuPage County, Illinois. the Daily Herald reports:
  • In the time leading up to his arrest, after confessing to co-workers to stealing potential homebuyers' earnest money, Harry "Bud" Simons told an investigator he knew the hammer would drop soon.

    A 12-member DuPage County jury swung that hammer [last week], convicting the former Burr Ridge real estate broker of all five counts of theft he was charged with. The jury deliberated for little more than an hour after the four-day trial. Simons now faces between four and 15 years in prison.

    Prosecutors said that between February 2013 and February 2014, Simons accepted earnest deposits totaling $145,300 from clients who wished to purchase homes being sold by his real estate agency, County Line RE/MAX in Burr Ridge.

    But once business slowed and the former Willowbrook resident began having trouble paying the agency's bills, prosecutors said, he began transferring money from the agency's escrow account that holds the buyers' earnest money into the agency's operating fund. In all, more than $239,000 was transferred among the accounts in 68 transactions.

    Closings on homes ranging in price from $1.6 million in Oak Brook to $55,000 in Berwyn were in jeopardy as agents and their clients began to discover their money was gone.

    "Twelve people put money down to secure their purchase of a home and to live the American dream, only to have it taken from them by a man who they'd never even met," Assistant State's Attorney Shanti Kulkarni told jurors during his closing arguments. "(Simons) left the buyers, sellers and agents scrambling to clean up his mess."(1)

    Several buyers and their agents testified that in several of the cases, the agents made up for the loss by taking the money from their own commissions because "it was the right thing to do."

    Simons' attorney, John Paul Carroll, maintained throughout the trial that prosecutors' account of events is accurate and put on no defense, but he said Simons wasn't guilty of the theft because he never intended to deprive his customers of their earnest money permanently.

    "He did what he wasn't supposed to do. He was bad. He was naughty," Carroll told jurors in his closing arguments. "He never took (the money) without believing he could put it all back. But in 2013 things started to get a little rocky, and he just couldn't keep up."

    An investigator testified during the trial that Simons told him he knew in March 2013, when it was clear the business was failing, that he would never be able to pay back the money.

    "You cannot pay back $239,000 on hope," Assistant State's Attorney Diane Michalak said in her closing rebuttal.

    Michalak requested Simons be taken into custody, but Judge Robert Miller denied her request. Simons is next due in court on Jan. 6, when a sentencing date would likely be set.
Source: Burr Ridge real estate broker guilty on all theft counts.
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(1) The Illinois Department of Financial & Professional Regulation maintains a real estate brokerage ripoff reimbursement fund (aka Real Estate Recovery Fund), from which a limited amount of losses may be recovered by a victim of a real estate agent. Losses from embezzlement of money or property, or losses resulting from money or property being unlawfully obtained from any person by false pretenses, artifice, trickery, or forgery or by reason of any fraud, misrepresentation, discrimination, or deceit by or on the part of any real estate licensee or the unlicensed employee of a licensee and that results in a loss of actual cash money, as opposed to losses in market value, can be recovered.

Recovery is limited to $25,000 per victim, together with costs of the lawsuit a victim must bring to secure a money judgment and attorney's fees incurred in connection therewith of not to exceed 15% of the amount of the recovery ordered paid from the Fund. The maximum liability against the Fund arising out of the activities of any one real estate licensee or one unlicensed employee of a licensee is currently $100,000. Source: Illinois Compiled Statutes - 225 ILCS 454/20-85.

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