The St Louis Business Journal reports that the former vice president of a Clayton title insurance agency pleaded guilty Wednesday for his role in a $2.8 million mortgage fraud scheme, said U.S. Attorney Catherine Hanaway. Thomas Kurzenberger Jr., 37, of Ballwin, pleaded guilty to one felony count of mail fraud. He faces a maximum penalty of 20 years in prison and/or a $250,000 fine, and restitution is mandatory. He is scheduled to be sentenced in January.
Click here for the Information (defendant waived his right to prosecution by Indictment). A copy of the plea agreement is not yet available.
Click here to read the Press Release from US Attorney Catherine L. Hanaway
Between January 2000 and June 2005, Kurzenberger withdrew nearly $2.8 million from several of Title Insurers Agency ‘s escrow accounts. He used $1.25 million to pay his personal credit card bills and the rest for general operating expenses of the company.
In addition, Kurzenberger continued to make escrow agreements and accepted escrow deposits from customers without disclosing that the agency’s escrow accounts were deficient. Title Insurers Agency at 226 S. Meramec Ave. collapsed in June 2005. Its two underwriters were Chicago Title Insurance Co. and Columbian National Title Insurance Co.
Thomas B. Kurzenberger Jr., a former vice president of the business, was sentenced on Jan. 24 to six years in prison for taking $2.7 million from customers’ escrow accounts.
Prosecutors said Kurzenberger Jr. had a cocaine addiction and used more than $162,000 to pay off credit card charges at a strip club in Illinois.
On January 26th, 2006n the DOJ released the following press release
St. Louis , Missouri : Thomas Kurzenberger, Sr., the President of a Clayton title insurance agency has been indicted on mail and wire fraud charges involving a $5.7 million mortgage fraud scheme, United States Attorney Catherine L. Hanaway announced today.
After Title Insurers Agency collapsed in June 2005, many individuals and entities suffered losses, some of which were caused by Mr. Kurzenberger’s withdrawals from customer escrow accounts. People who believed their money was being held in escrow pending a loan’s closing and those who believed their money was being held in construction disbursing escrow accounts lost in excess of $1,000,000. Chicago Title Insurance Company covered over $200,000 of insufficient funds escrow checks and construction disbursing checks; First American Title Insurers Company covered over $4.5 million worth these checks.
“As we have said previously, escrow means escrow,” said Hanaway. “When title company executives get into customers’ escrow funds, they will be prosecuted.”
THOMAS KURZENBERGER, SR. , 64, Cerromar Drive, Eureka, Missouri, was indicted by a federal grand jury on one felony count of mail fraud and four felony counts of wire fraud. Additionally, Kurzenberger was charged with a forfeiture count, which, if convicted, will require the forfeiture of any property derived from the illegal activity.
According to the indictment, between January 2000 and June 28, 2005, Kurzenberger, Sr. withdrew approximately $1,517,836 from customers’ escrow accounts to cover general operating expenses of Title Insurers Agency. Additionally, between January and June 2005, Kurzenberger, Sr. continued to enter into escrow agreements, and accepted escrow deposits from customers, without disclosing that there was a deficiency in the agency’s escrow accounts.
The indictment states that on February 24, 2005, after Chicago Title Insurers discovered approximately $250,000 missing from their construction disbursing account, Kurzenberger, Sr., transferred the same amount from the main escrow account at First Bank, through his personal bank account back to the construction disbursing account to make it appear that he reimbursed the missing money rather than just moving it from one account to another.
If convicted, Kurzenberger faces a maximum penalty of twenty years in prison and or a $250,000 fine, per count of the indictment.
Title Insurers Agency, Inc. was formed in 1981 and had its main office at 226 South Meramec Avenue, Clayton, Missouri. They used two underwriters which were Chicago Title Insurance Company and Columbian National Title Insurance Company (now First American Title Insurance Company).
Hanaway commended the work performed on the case by the United States Postal Inspection Service, the Federal Bureau of Investigation, Department of Housing and Urban Development-Office of Inspector General and Assistant United States Attorney Jeffrey Jensen, who is handling the case for the U.S. Attorney’s Office.
The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.
On April 12, 2006 the St. Louis Post Dispatch reported that Thomas Kurzenberger Sr and his Andrea had been found dead at their home in Eureka, MO in what is apparantly a double suicide.
Police and Prosecutors say that the couple were distraught about the indictment of Thomas Sr, their son’s conviction and humiliated by the information that came out at their son’s trial. Court documents from the trial revealed that Kurzenberger Jr. spent from $200 to $500 a night at the Diamond Cabaret in Sauget, renamed the Penthouse Club, beginning in March 2002. There were more than 220 visits thereafter, with single-day charges peaking on July 28, 2004, at $6,666. He visited the club as often as five times a week, prosecutors said, and routinely tipped hundreds of dollars.
An attorney for Kurzenberger Sr., Art Margulis, is reported to have said that his client acted only to keep the company afloat at a time of losses, "and not for any improper purposes."
Kurzenberger Sr. was due in U.S. District Court in St. Louis today to plead guilty, said another of his lawyers, William Margulis. Under an agreement with prosecutors, Kurzenberger would have faced a prison sentence and would have had to make restitution, William Margulis said