Second Guaranty Title co-owner pleads guilty to fraud

One of the co-owners of Guaranty Title pleaded guilty to several counts of fraud Monday related to a $2.7 million scheme, just days after her fellow co-owner did the same.

Kathy Cyrena Allen, also known as Kathy Stanton, pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit bank fraud and conspiracy to commit money laundering, according to a news release from the U.S. Attorney for the Western District of Missouri.  Her co-defendant, Richard Burton, pleaded guilty to similar charges April 13.

Allen was 42 percent owner and vice president of Guaranty, which had at least 10 branch offices in Aurora, Branson, Mount Vernon, Ozark, Republic and Springfield.  

Allen and Burton have both admitted that they took money given to the company for closing costs, which was supposed to be kept in escrow accounts separate from company funds. The company diverted more than $2 million to the company's business operating funds, and the money was recorded as loans, the release said.

By April 2007, deposits into Guaranty's main escrow account no longer covered the shortages caused by the thefts, the release said. At that point, both conspirators concealed the shortage by having the company write and deposit checks between various accounts at Great Southern Bank and Ozark Mountain Bank. Neither bank had accounts with enough money to cover the checks.

Ozark Mountain Bank, which discovered the fraud and closed Guaranty's account, lost nearly $700,000 as a result, according to the release, though it's unclear how much Great Southern lost.

The release said Allen faces up to 70 years in federal prison without parole, along with fines of up to $1.25 million plus restitution. A sentencing hearing is yet to be scheduled.