Closing Agent Gets 20 Months For Stiffing Title Insurance Underwriter, Others Out Of $470K+ In Policy Premiums, Closing Costs From Real Estate Deals

From the Office of the U.S. Attorney (St. Paul, Minnesota):

• A 45-year-old woman from Prior Lake was sentenced [] in federal court for stealing more than $470,000 designated for payment of title insurance premiums and recording fees. In St. Paul, United States District Court Judge Paul A. Magnuson sentenced Roseann Wagner to 20 months in prison on one count of wire fraud and one count of failure to file a tax return.

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• In her plea agreement, Wagner admitted operating a scheme to defraud mortgage lenders, borrowers, and a title insurance underwriter from January 2007 to December 2007. Wagner, a licensed insurance agent, owned and operated Tri-Star Title, a title insurance agency. [...] Wagner accepted more than $470,000 from lenders at hundreds of residential real estate closings, knowing the money was to be used to pay closing costs, including title insurance premiums and recording fees. Instead, however, she used the money for her own benefit. Initially, because of Wagner’s fraud, title insurance premiums, title search costs, and recording fees on hundreds of residential mortgage transactions went unpaid.

• However, when Stewart Title Guaranty Company, the Texas title insurance underwriter for Tri-Star, discovered Wagner had misappropriated the funds, it absorbed the losses of all borrowers and paid the title insurance premiums and other expenses, though it was under no obligation to do so. Wagner also failed to file a tax return or pay taxes on more than $270,000 in 2007. The tax loss from her failure to report income was at least $70,000.(1)

For the U.S. Attorney press release, see Prior Lake woman sentenced for stealing more than $470,000 through mortgage fraud scam.

(1) In Minnesota, any person who has lost money due to the fraudulent, deceptive or dishonest practices, or conversion of trust funds by a licensed closing agent [or licensed real estate broker or salesperson] should contact the state's Department of Commerce's Real Estate Education, Research and Recovery Fund for possible reimbursement. According to their website:

• The purpose of the Real Estate Education, Research and Recovery Fund is to compensate any person who has lost money due to a licensed real estate broker, salesperson, or closing agent’s fraudulent, deceptive or dishonest practices, or conversion of trust funds. The improper action that was committed must be an activity that required a license. [...] Applicants may be awarded any amount from $0 to $150,000, [...].