Thursday, March 8, 2012

Now-Jailed Attorney Loses Law License For Pocketing $1.1M+ In Loan Proceeds From Client Home Refinance Transactions Meant For Existing Lien Payoffs reports:

  • The Kentucky Supreme Court permanently disbarred a local lawyer Thursday for keeping more than $1.1 million that should have gone to pay off closings on homes. Donald Lynn Richardson, 55, of Crescent Springs is currently at the federal prison in Ashland after previously being convicted of one count of bank fraud in federal court in Cincinnati. He is scheduled to be released in August.

  • Richardson’s trouble started in May 2010 when he and his Commitment Title Agency was used by Fifth Third Bank to refinance home mortgages. In one week, Richardson didn’t turn over $1,124,034.63 from five mortgages refinanced by the bank.

  • The Cincinnati-based bank found out about the incidents when customers called to complain about their old mortgages not being paid and receiving foreclosure threats. Because the bank didn’t want those refinanced homes to go into foreclosure, it forked over an additional $1.1 million to pay off the old mortgages.

  • Richardson and his title company “pose a significant risk of liquidating their assets and property and fleeing,” according to court records. Bank attorneys said in court that they suspected there were other similar transactions involving Richardson in which money went missing.

  • To complete home refinancings, the bank placed in escrow the money to pay off the old mortgages. Richardson and his title company didn’t forward that money to pay off the mortgages but kept it, spending it on the “purchase of real and personal property, to pay personal debts and to otherwise convert the funds to their own use,” according to court records. Four of the refinanced homes involved are in Ohio – all north of Columbus – and one is in Indiana.

Source: Attorney disbarred after keeping $1.1 million.

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