Lawsuit: $4.5M missing from Guaranty Title’s escrow accounts

In the suit, Commonwealth Land Title Insurance Co. in St. Louis asked Judge Mark Orr for a temporary restraining order as well as preliminary and permanent injunctions to freeze accounts belonging to Guaranty Title or its sister companies. Orr granted a temporary restraining order yesterday that prohibited the company and its owners ¬– Rick Burton, Kathy Allen and Stephanie Gray – from tampering with or disposing of files.

Last week, two auditors with Commonwealth’s parent company, Virginia-based LandAmerica Financial Group, began reviewing the title company’s financial records. The audit is being supervised by the Missouri Department of Insurance, which also is investigating the alleged mishandling of funds at Guaranty Title.

Senior auditor Kevin Hickey stated in his affidavit that discrepancies at the title company included shortages in escrow accounts, checks written without sufficient funds to cover payments and insufficient funds to operate the business.

As of Tuesday, Hickey put the shortage at $4.5 million, according to court records.

That same day, Hickey met with Allen, who admitted to a “scheme of commingling and transferring funds between and among different banks and multiple accounts to replenish shortages and to also mask shortages,” according to the suit. Allen says the amount missing is about $1.8 million, according to the suit.

The audit is ongoing, records show.

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