YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
A year has passed since Guaranty Title Co. collapsed, and no one has been arrested or criminally charged in connection with an alleged check-kiting scheme that swindled former customers out of millions of dollars.
While parties slog through the court system in hopes of recouping at least some of the money they lost, the local FBI office is continuing its financial fraud investigation into the now-defunct Nixa-based title agency.
“All I can say is that we’re aggressively conducting an investigation pursuing those who are responsible for any criminal acts involved in the Guaranty (Title) debacle,” said FBI Supervisory Special Agent Dean Bryant. “Obviously, we do anticipate that there will be some folks who will be called to account for what’s happened.”
He added: “I can’t say when. There are a lot of variables, but we’re staying all over it. It’s certainly one of our higher-priority matters.”
Guaranty Title unexpectedly closed its doors June 19, 2007, shuttering nine regional offices – primarily in Greene and Christian counties – and laying off about 45 employees.
Guaranty Title’s underwriter, Virginia-based LandAmerica Financial Group, swooped in to conduct an audit of its agent and quickly discovered at least $5.1 million missing from escrow accounts at area banks.
The money belonged to real estate developers, banks and construction contractors as well as homebuyers and sellers left in the lurch when Guaranty Title -– co-owned by Kathy Allen, Rick Burton and Stephanie Gray – abruptly shut down.
According to Christian County court records, Allen, of Sarcoxie, has 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.”
Earlier this month, the Missouri Department of Insurance, Financial Institutions and Professional Registration revoked insurance producer licenses belonging to Burton, of Nixa, and Gray, also of Sarcoxie, after they signed a consent order. The revocation was immediate and indefinite in scope, said DIFP spokeswoman Emily Kampeter.
Allen, who is also known as Kathy Stanton, did not settle her portion of the DIFP complaint and is scheduled to appear before the Administrative Hearing Commission on Nov. 3 in Jefferson City.
Meanwhile, several former Guaranty Title customers who intervened in LandAmerica’s lawsuit against its former agent have argued that the underwriter is partly to blame for the fiasco.
In January, Christian County Circuit Judge Mark Orr granted plaintiff Branson Hills Development Co.’s request for access to LandAmerica’s internal audits of Guaranty Title as well as DIFP investigative documents, although Orr issued a protective order to keep the documents out of the public record.
Branson Hills attorney Rodney Nichols, with Carnahan, Evans, Cantwell & Brown PC in Springfield, told the judge in January that he had seen a DIFP investigative report that suggested LandAmerica knew at least $600,000 was missing from Guaranty Title’s escrow accounts in April 2006. The state report also indicates that, in November of that year, Guaranty Title signed a $380,000 promissory note paid to LandAmerica over two years, Nichols said, suggesting the underwriter had a motive to keep the agency in business.
Other parties who lost money when Guaranty Title went under are still struggling to navigate the legal system.
In March, Springfield attorney Bryan Wade told Springfield Business Journal he was considering litigation on behalf of former Guaranty Title customers with smaller claims, although court records indicate no such litigation ever materialized. Wade, with Husch Blackwell Sanders LLP, could not be reached for comment. [[In-content Ad]]
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