Disbarred Lawyer Arrested for Misappropriating Closing Funds
Neal Landers, 45, Duluth, Georgia was arrested on federal charges that Landers stole money from his clients after acting as the closing attorney for their real estate transactions. United States Magistrate Judge C. Christopher Hagy will arraign Landers on charges of wire fraud, money laundering, bank fraud, and making false statements.
According to the charges, and other information presented in court: Beginning in 2007, Landers allegedly exploited his position as a closing attorney by misappropriating the funds from real estate transactions. Specifically, Landers is charged with receiving money transfers into his escrow account from several real estate closings. Once the real estate transactions were complete, Landers was required to disburse these funds.
However, according to the indictment, Landers delayed paying out the funds for weeks and sometimes for months. Rather than promptly disbursing the funds for the recently-closed properties, Landers used those funds to pay out the parties from previously completed real estate transactions (who should have been paid earlier). Landers is also charged with transferring funds, in amounts that far exceeded any closing fees and/or costs, from his escrow account to a checking account. He then used that money to pay various personal expenses. Finally, Landers is charged with making false statements on a loan application. The fraud alleged in the indictment totals more than $1.5 million.
On March 20, 2012, a federal grand jury returned an indictment charging Landers with wire fraud, money laundering, bank fraud, and making false statements. The most serious of the charges carries a maximum sentence of 30 years in prison and a fine of up to $1,000,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Landers was disbarred by the Georgia Supreme Court in 2009.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government's burden to prove the defendant's guilt beyond a reasonable doubt at trial.
United States Attorney Sally Quillian Yates announced the arrest.
United States Attorney Sally Quillian Yates said, "In real estate closings, lenders trust the attorneys who represent them to fairly and honestly conduct the closings and appropriately handle the funds with which they are entrusted. This defendant is charged with running a Ponzi scheme out of his law firm, often using the proceeds from real estate transactions for his own personal benefit rather than the business purpose for which they were intended."
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey W. Davis is prosecuting the case.
source: Mortgage Fraud Blog