Man Admits $800,000 Mortgage Fraud Scheme

Allison Tussey —  May 25, 2010 — Leave a comment

Dale Charles Dodge, Jr., 61, Alexandria, Minnesota, pleaded guilty to charges connected to a scheme to defraud mortgage lenders and others out of more than $800,000. Dodge Jr. pleaded to one count of wire fraud and one count of engaging in a monetary transaction with property derived from specified unlawful activity, commonly referred to as money laundering. Dodge was indicted on September 15, 2009.

In his plea agreement, Dodge admitted that from 2002 through 2005, he operated a title closing company under the names Premier Title & Abstract, Inc., and Verity Title & Abstract.

As part of that operation, he maintained an escrow account, into which mortgage lenders regularly deposited loan proceeds for distribution at transaction closings pursuant to the terms of the real estate agreements. He also contracted the services of a title insurer, who underwrote most of the real estate transactions closed through his company. Title insurers, often called underwriters, are liable to lenders, borrowers, and others if escrow and other transaction funds are improperly disbursed.

The plea agreement goes on to state that between 2002 and 2005, Dodge admittedly executed a scheme to defraud mortgage lenders and others out of large sums of money by diverting loan proceeds from the escrow account at his title company. The money was used for his personal benefit as well as the benefit of his company and others involved in the scheme. Specifically, Dodge fraudulently removed the funds or caused the funds to be removed from the escrow account to pay his salary and the salaries of company employees in addition to other non-escrow business expenses. Frequently, those expenses were paid through wire transfers from the escrow account to other accounts under Dodge’s control. Furthermore, Dodge admitted concealing these actions from his title insurer, mortgage lenders, and property sellers and purchasers.

Dodge’s fraud scheme caused losses of more than $800,000. Approximately $844.561.60 is owed to one specific mortgage lender, who mistakenly deposited money into Dodge’s escrow account. An additional amount is owed to First American Title Insurance Company, Dodge’s title insurer, which was required under law to pay certain outstanding escrow obligations for which Dodge was unable to pay.

For his crimes, Dodge faces a potential maximum penalty of 20 years in prison for wire fraud and ten years for money laundering.

This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Tracy L. Perzel.

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Allison Tussey

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