A Rockville Centre man has entered a plea of not guilty to charges that he stole $870,000 earmarked for the payment of his clients’ filing and recording fees, taxes and other expenses related to various real estate transactions.
Authorities say that Gerard Timoney, an agent who issued title insurance policies on behalf of Stewart Title Insurance Company and Commonwealth Land Title Insurance Company, accepted customer funds to pay the fees and the taxes in connection with real estate purchases and refinancing transactions. He then allegedly used the money to pay personal obligations such as child support payments, credit card bills, and expenses on his investments, among others. As a result, in many cases taxes were not paid and mortgages and deeds were not recorded or filed. He was arrested last week on charges of second degree larceny, and on Friday he pleaded not guilty to those charges.
In New York, grand larceny in the second degree (larceny where the value of the property stolen is between $50,000 and $1 million) is a class C felony.
The surprising thing about the story, assuming the allegations are true, is not that it happened, but rather that it went on so long before being discovered. The thefts reportedly began as early as 2007, but were not discovered for years. A 2010 audit by Stewart Title disclosed 90 properties that were involved during the prior three-year period.
The reason we’re surprised that the allegations took so long to surface is that these are not small, fly-by-night companies, and we were somewhat taken aback by the fact that stricter safeguards are not in place. Commonwealth Title, for example, has been in business since 1876. In terms of premiums paid in New York, Stewart title was number one among all the title companies during the first half of 2012, and Commonwealth Title came in at number 5. During that same six month period, the two companies collected title insurance premiums totaling over $800,000,000.
We expect that the two insurers will absorb the theft, and make good on any customer losses. But whatever the final result is in the Rockville Centre case, look for both of these companies to tighten up controls on their agents.
George Vomvolakis Law Offices
275 Madison Avenue
New York, NY 10016
(212) 682-0700