State Fines Anaheim Title Firm $1 Million

The California Department of Insurance fined an Anaheim title insurance company $1 million for paying nearly $500,000 in improper kickbacks to real estate agents and brokers to attract business, the department announced Tuesday.

In addition to the fine, Diversified Title & Escrow Services Co. faces an 18-month license restriction that requires it to comply with all state laws. If the company violates these restrictions, the department’s enforcement staff can ask the state insurance commissioner to immediately revoke its license.

“These illegal rebates offered to real estate agents and brokers do nothing for the consumer,” Insurance Commissioner John Garamendi said in a statement.

The firm previously was known as South Coast Title Corp. In February 2002 the San Diego district attorney’s office charged a former South Coast Title employee, James Reiser, with felony commercial bribery for his alleged role in the kickback scheme. The case is slated for a preliminary hearing in San Diego County Superior Court in January.

Joseph McCabe, executive vice president of Diversified Title, declined to comment on the Reiser case.

But McCabe said the company ran afoul of the state laws because California’s insurance code was murky on what kinds of gifts were allowed. “It’s hard to grasp the logic of what is and isn’t a violation,” he said, noting that one alleged violation involved flowers the company sent when a customer’s son died.