Brian Madden, former president and co-founder of Liberty Title Agency LLC (“Liberty Title”), was sentenced to 20 months in prison on September 20, 2011. Madden misappropriated and embezzled escrow and other client funds from his company to two other insurance agencies that he controlled and operated in New York. Last December he pled guilty to wire fraud and embezzlement.
Manhattan U.S. Attorney Preet Bharara said: “Brian Madden held himself out to be an honest insurance broker who gave his clients a false sense of security by leading them to believe their property was protected against potential loss. In reality, he raided their accounts for his own personal gain and stole from one client to pay another to cover his tracks. His crime spree has come to a fitting conclusion.” – Source.
Liberty Title was one of the largest independently-owned title insurance agencies in New York State. Title insurance is meant to protect an owner or lender’s financial interest when a property is purchased. Liberty Title misused the trust and need of clients’ funds by transferring and misappropriating millions of dollars as early as 2008. The funds were transferred to accounts held by Skyline Title, GNY Liberty, and Liberty Title. After the transfer these funds were used to keep Liberty Title afloat among personal uses of Madden. Between January of 2008 and April 0f 2009 Madden had withdrawn more than $2 million in cash from Liberty Title’s account.
Madden would also use new clients’ funds to pay old clients’ debts. Ponzi Alert!
On top of all of this fraudulent behavior Madden also failed to “timely and properly record and pay taxes on dozens of mortgages and other real estate transactions, further exposing his clients to loss.” – Source.
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