Man Indicted for Receiving Misappropriated Escrow Funds

Allison Tussey —  October 14, 2013 — 1 Comment

Michael Krause has been indicted on charges of wire fraud and conspiracy for his alleged role in misappropriating and failing to pay off a prior mortgage with the funds from a new loan.

According to the indictment, Krause worked at First Alliance Title, Incorporated, Annandale, Virginia. Krause worked with his aunt, coconspirator A. M., who was the owner and settlement agent at First AllianceKrause and A.M. also provided settlement services through K&M Title and Escrow, Incorporated, Annandale, Virginia, which they owned and operated as partners. First Alliance maintained an escrow account at Commerce Bank located in Fairfax, Virginia.

Krause purchased the real property located at 3308 Clayborne Avenue, Alexandria, Virginia, on or about March 24, 2006 for $810,000. Krause financed the transaction with two mortgage loans funded by Bear Steams Residential Mortgage in the amounts of $648,000 and $162,000.

On or around November 15,2006, Krause refinanced 3308 Clayborne Avenue with two loans that were originated by SunTrust Mortgage in the amounts of $676,800 and $125,000. The refinancing settlement was conducted by A.M. at First Alliance. SunTrust Bank funded Krause‘s loans by wire transfer into First Alliance‘s escrow account on or about November 20, 2006.

In conducting the closing of Krause‘s refinance, A.M. failed to pay off the Bear Stearns loans that Krause had obtained when he purchased 3308 Clayborne Avenue. Instead, a series of unauthorized disbursements were made from First Alliance‘s escrow account into the personal bank accounts of Krause and A.M and to other unauthorized third parties. Those unauthorized disbursements totaled approximately $789,000.

 

Krause

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One response to Man Indicted for Receiving Misappropriated Escrow Funds

  1. I don’t understand how people expect to get away with gross misconduct like this anymore. A paper trail is hard to cover up and wire fraud can be easily traced. People should stop overspending and live within their means.

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