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Stewart Title Guaranty Co. v. Sanford Title Services, LLC

United States District Court, Fourth Circuit

October 8, 2013

STEWART TITLE GUARANTY COMPANY, Plaintiff,
v.
SANFORD TITLE SERVICES, LLC, Defendants.

MEMORANDUM OPINION

Ellen Lipton Hollander United States District Judge.

Stewart Title Guaranty Company (“Stewart Title”), plaintiff, filed a complaint against nineteen defendants, containing twelve counts, arising out of an alleged scheme to defraud plaintiff by theft of funds held in escrow accounts; those funds were intended to satisfy mortgages and to pay recording fees, title insurance premiums, and real property taxes for property owners and lenders insured by Stewart Title. See Complaint, ECF 1.[1] As a result of the thefts, Stewart Title had to expend substantial sums to cover the losses. All claims have been resolved, with the exception of those lodged against defendant Nieshia Williams. See Status Report, ECF 220; Order Dismissing Claims, ECF 222.

Stewart Title has filed a motion for summary judgment against Ms. Williams (“Motion, ” ECF 183), supported by a memorandum (“Memo, ” ECF 183-1) and exhibits. Ms. Williams has not responded to the Motion.[2]

Factual Summary

In its Memo, Stewart Title summarized its allegations against Ms. Williams as follows, Memo at 3 (citations omitted):

The Defendant, along with her father, Leon Williams, and Defendant’s corporation, Revolutionary Marketing, Inc. (“Revolutionary Marketing”), arranged for “straw buyers” to purchase real property, then split the sale proceeds between themselves, the seller and the straw buyer. Sanford Title Services, LLC (“Sanford Title”) was the settlement company for many of these transactions. The Defendant, Leon Williams, and Revolutionary Marketing received escrow funds directly in numerous Sanford Title transactions. Sanford Title’s auditor, Ronald Talbert, could find no legitimate reason or explanation for the Defendant’s receipt of those escrow funds. Through those transactions (and other Sanford Title closings) the Defendant and her co-conspirators received hundreds of thousands of dollars in escrow funds to which they had no rightful claim. As detailed more fully herein, the conspirators received (at least) the following sums directly from Sanford Title’s escrow account: Nieshia Williams - $186, 677.04; Revolutionary Marketing: $202, 160.02; Leon Williams - $174, 677.04.

Relying on voluminous bank records, real estate settlement documents, affidavits, and deposition testimony, Stewart Title set out the contours of the scheme allegedly perpetrated by Ms. Williams and her co-conspirators. Specifically, Stewart Title provided extensive evidence establishing that $388, 837.06 of escrow funds were diverted either to Ms. Williams or to her company, Revolutionary Marketing, and then spent by Ms. Williams on “expensive cars, international travel, and extravagant shopping sprees.” Id. at 7; see Affidavit of Ronald Talbert, Sanford Title’s auditor (“Talbert Aff., ” ECF 183-3) ¶¶ 5; Citi Documents, Memo Ex. D (ECF 183-5); Bank Records, Memo Ex. F (ECF 183-7).

In its Memo, plaintiff described various fraudulent occurrences, including the following.

Ms. Williams approached Jillian Harper, an acquaintance of hers, and offered her $10, 000 to act as a “straw buyer” in a real estate purchase. See Deposition of Jillian Harper (“Harper Dep., ” ECF 183-4) at 14–15. Ms. Williams explained that an unidentified man with bad credit wanted to purchase property at 1307 W. Lombard Street in Baltimore, Maryland, but was unable to obtain a loan. Id. Ms. Williams convinced Harper to procure a loan of $272, 000, claiming that the man would pay the mortgage for six months while Ms. Williams “cleared up his credit.” Id. Once the man’s credit problems were fixed, the man would purchase the property from Harper. Id. at 22. Harper took out the loan on her credit, and most of the funds from the loan were placed in an escrow account held by Sanford Title. Id. Then, Sanford Title wired $174, 289.50 of those funds to Ms. Williams’ company, Revolutionary Marketing, which then wired at least $45, 000 into Ms. Williams’ personal bank account. See Talbert Aff. ¶ 5(d). Ms. Williams falsified settlement documents and paid the mortgage for several months, but she never arranged for the unidentified man to purchase the property. Harper Dep. at 30–31, 39–40. Eventually, Ms. Williams “disappeared” and left Harper with the mortgage in Harper’s name. Id. at 30.

Sanford Title conducted closings and issued title insurance policies for several of the fraudulent transactions underwritten by Stewart Title. See, e.g., Memo Exs. N-2, O-3. When Sanford Title ran out of funds to cover its obligations to policyholders, Stewart Title was forced to reimburse those policyholders, record instruments, purchase title reports, pay property taxes, pay escrow shortages, pay off existing liens, and “otherwise resolve any claims that were adverse to the interests of the insured owners and lenders.” Affidavit of Mark V. Borst, Vice President and Regional Claims Counsel for Stewart Title (“Borst Aff., ” ECF 183-8) ¶ 5; see Id . ¶¶ 2–7.

Stewart Title sought to depose Ms. Williams on August 5, 2011. See Deposition of Nieshia Williams, ECF 183-2. Ms. Williams provided her name and home address, but thereafter she invoked her Fifth Amendment right against self-incrimination and refused to answer all other questions. Id.

Ms. Williams was charged criminally for her conduct. See United States v. Nieshia Williams, Case JKB-12-659 (D. Maryland).[3] On March 1, 2013, Ms. Williams signed a plea agreement, in which she agreed to plead guilty to conspiracy, arising out of the same fraudulent scheme alleged by Stewart Title, in violation of 18 U.S.C. § 1349. See Plea Agreement, ECF 223-3.[4] In the Plea Agreement, Ms. Williams admitted, id. at 2:

Defendant knowingly and willfully combined, conspired, confederated, and agreed with [co-conspirators] to participate in a scheme to defraud banks, lenders, lien holders, a title insurance company, [5] and buyers and sellers of real estate and obtain money or property by materially false and fraudulent pretenses, representations or promises . . . in violation of 18 U.S.C. § 1343.

Under the plea agreement, Ms. Williams also admitted that she “knew of the unlawful purpose of the agreement” and that she “joined in the agreement willfully, that is, with the intent to further its unlawful purpose.” Id. In addition, Ms. Williams agreed to a lengthy Factual Stipulation, which recounted in detail her involvement in the Conspiracy. See ECF 223-3. And, as part of the Plea Agreement, Williams agreed “to the entry of a Restitution Order ...


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