New York – The FBI announced today, that Brian Madden, who controlled and operated three title insurance agencies in New York and Suffolk counties, was arrested today for misappropriating millions of dollars of escrow and other client funds and embezzling a portion of those funds for his own benefit. As alleged in the Complaint unsealed today in Manhattan federal court.
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Madden was the president and co-founder of Liberty Title Agency, LLC (“Liberty Title”), one of the largest independently-owned title insurance agents in New York State.
Liberty Title issued title insurance policies on behalf of several title insurance underwriters in onnection with commercial and residential real estate transactions, primarily in the northeastern United States. Madden also controlled and operated two other title insurance agencies: Skyline Title, LLC, and GNY Liberty Abstract, LLC. Liberty Title closed down in April 2009 after several of its agency contracts with title insurance underwriters were terminated.
Commencing around early 2008, MADDEN misappropriated escrow and other client funds from Liberty Title, Skyline Title, and GNY Liberty Abstract in order to sustain operations at Liberty Title, and to support the significant cash draws he was taking from the company. In particular, between January 2008 and April 2009, Madden took approximately $2.2 million in cash draws from Liberty Title. Those cash draws, which at times amounted to $300,000 or more in a single month, far exceeded Madden’s draws in prior years, and were taken despite the deterioration in the real estate market throughout 2008. To sustain Liberty Title’s operations in the face of such draws, and to pay current client
debts, MADDEN misappropriated escrow and client funds of other clients, essentially using new funds from clients to pay off older debts on behalf of other clients.
For example, Liberty Title provided title insurance services to a large New York City developer in onnection with a closing in December 2008. Liberty Title received funds from the developer to pay approximately $2.1 million in mortgage real estate taxes for the transaction and to record the transaction. However, Liberty Title did not use these funds for their intended purpose. In February 2009, when Liberty Title issued a check for approximately $2.1 million on the transaction, it lacked
sufficient funds to cover the check, even after moving funds from another account. Therefore, Liberty Title used escrow funds misappropriated from another of its clients, as well as escrow funds entrusted to GNY Liberty Abstract, to pay a portion of the tax due on the transaction. It was also later discovered that Liberty Title had failed to timely record dozens of real estate transactions, despite having already received payments to record such transactions. Many of these recording files were kept in Madden’s office away from where Liberty Title typically kept such files.
Madden, 55, of Greenlawn, New York, is charged with one count of insurance fraud and one count of wire fraud. The insurance fraud count carries a maximum sentence of 10 years in prison and a maximum fine of the greater of $250,000 or twice the gross pecuniary gain or loss from the offense. The wire fraud count carries a maximum sentence of twenty years in prison and a maximum fine of $1 million or twice the gross pecuniary gain or loss from the offense.
another MADOFF????????????????????????????
the good news for him is -he should now be eligable for a stimulas bonus/bailout from prez obama
and thats why closing costs are so high. its time ny state does away with title insurance
Everyone is innocent until proven guilty! Hold your horses before commenting
Looks like the whole country needs a major overhaul, as fraud and corruption have reached the highest levels!!!!
This is not Madoff. This is a typical story where a person was probobly running a legitimate buissnes, fell into a hole and was trying to dig out. He does not seem like an evil person.
Please, a legitimate businessman does not take the volumes of money being talked about in this matter for the sole purposed of living a life he couldn’t afford. Title expenses are not the bulk of closing fees, and without title insurance, purchasers, borrowers and lenders would not be protected from corrupt people that scam and do not pay their taxes and have judgments and liens on their properties. The problem is not the title insurance industry. Fees are state regulated so all title companies charge the same fees. The problem, as always, are a few corrupt individuals that will stop at nothing for personal gain. Proof is already available and I’m sure Madden will be found guilty. I am also sure that more and more of these Madoff like Ponzi schemes will be uncovered as the economy slows down the new money coming in. These embezzlers will be exposed as they run out of new money to cover up the old money they stole.
Thats why its called Title insurance because they get a new Title…Now its Ganef
Madden, Madoff.. I think the Gov should just go through the phonebooks and arrest anyone who’s a corporate officer and who’s last name begins with “m-a-d” !! they’re all mad I tell you!
I say go thru the entire telephone book and any name that sounds like madoff mannes ect should cease being in money gesheften.. such people should only be allowed to work in the matzo bakery or cleaning the mikvah tiles
so do I have to worry if I just took a title insurance from this company on a property??
Yo do not have to worry about your title insurance as long as you have copies of your closing binder and marked up policy. Liberty was an agent for various underwriters not an underwriter.