Duped Clients Will Get Most of Their Money Back : Escrow: Home buyers and sellers allegedly embezzled by firm’s owners will receive 96% of their deposits.
An estimated 500 home buyers and sellers involved with Country Oaks Escrow Inc. when the firm was audited and closed in June are expected to eventually receive about 96% of the $2.75 million state investigators say was embezzled by the company’s owners.
However, the agency responsible for covering the losses is unsure exactly when the final payments will be made.
Investigators last week said they have accounted for all but $200,000 of the money believed to have been diverted from the Valencia company’s $4.5 million in trust funds.
The California Department of Corporations shut down Country Oaks Escrow on June 4 following a routine audit that uncovered shortages in several trust accounts holding deposits for real estate transactions.
Country Oaks Escrow was California’s third-largest escrow firm, with additional offices in Lancaster, Palmdale and Arcadia. About 500 clients had deposited money with the business at the time of the audit.
Burrow Escrow Co. of Santa Ana purchased the accounts following the Valencia firm’s closure.
Officials with Escrow Agents’ Fidelity Corp., the nonprofit agency that insures deposits for licensed escrow companies, say they will reimburse any funds shown to be fraudulently diverted.
“The EAFC comes into play when there has been an embezzlement,” said Stuart Zanville, public relations counsel for the company. “The EAFC is committed to paying 100% of the acceptable claims.”
Requests for repayments are pending from investigators, although it is unclear when the reimbursements will be approved by the insuring agency.
“There is no way of knowing how long it will take to distribute the funds,” Zanville said.
Country Oaks Escrow clients received about 75% of the missing funds--$2.1 million--in September, following a preliminary review of the financial records.
“It was felt it would be more desirable to disburse money as quickly as possible on all accepted claims rather than wait for the entire investigation to be completed, which would have held up payment,” said Bernie Selz, chairman of Escrow Agents’ Fidelity Corp.
“When the first proof of loss was filed, it was understood it was an interim payment,” Zanville said. “It was done at that time to expedite the payment as quickly as possible.”
The Department of Corporations has alleged in a lawsuit that owners Harold and Kathy Wiener embezzled the funds to pay for personal expenses and company costs.
But in a separate lawsuit, the Wieners, without acknowledging any wrongdoing, have alleged that Harold Wiener was affected by a combination of medications prescribed to him following heart surgery.
