Victimized Homeowners Receive $125K+ Restitution For Unpaid Taxes & Insurance In Escrow Ripoff; State Loan Originators Pick Up Tab For Defunct Racket

From the Office of the Indiana Attorney General:

• Attorney General Greg Zoeller [] announced 97 financial fraud victims have received $125,679.22 in restitution for taxes and insurance bills that went unpaid by defunct American Escrow, a Chicago-based company.

• "Paying property taxes and insurance is not optional for homeowners. Escrow accounts give people a peace of mind that critical bills will be paid on time by money held in trust. That peace of mind turned into a nightmare for thousands of homeowners all over the country when they discovered their tax and insurance bills had not been paid and the money had been squandered," Zoeller said. "This restitution will not undo the stress or erase the experience of being defrauded, but it will hopefully allow them an opportunity to gain back the financial stability for which they have been fighting."

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• Zoeller filed suit against American Escrow in June 2009 for violations of state consumer protection laws. A court judgment was ordered in January requiring the company to pay more than $600,000 in fines, attorneys' fees and consumer restitution.

• The judgment proved uncollectible because the company had no assets so the state legislature passed a new law making restitution funds available for the fraud victims. The new law, House Enrolled Act 1332, set aside $150,000 out of a loan broker account held by the securities division of Secretary of State Todd Rokita's office. The account is funded from license registration and renewal fees collected from loan brokers, mortgage loan originators, and principal managers.

For the Indiana AG press release, see Victims of escrow fraud receive $125,000 in restitution (Indiana lawmakers created unique solution to aid fraud victims).