Years ago under the direction of Jane Conklin, rather than each operation maintaining a staff of bookkeepers, the Company established regional accounting centers to serve direct operations across all brands on a regional basis. Seriously, the best idea ever!

The accounting centers process revenue, expenses, accounts payable, accounts receivable invoices and payments; but most importantly they serve as the check and balance with the escrow branch offices receiving and disbursing funds.

Sandra Sidor, an escrow trust account manager in the Denver OAC, was performing her monthly review of fee transfers for odd or small (less than $5) amounts. The audit is performed monthly to ensure escrow officers are not clearing positive balances in their files by posting additional revenue, instead of refunding money to the appropriate parties to the escrow.

The monthly audit includes a review of checks from the Company payable to the Company (e.g. checks drawn on a wholly owned Title Company account payable to the wholly owned Title Company) which could be evidence of improper file–to–file transfers to cover losses or shortages.

While reviewing an uncharacteristically small $4 fee transfer Sandra spotted an unrelated disbursement on a ledger that seemed out of place.  The $4 was odd enough, but directly above the $4 disbursement was a check to a bank in the amount of $550.

The subject transaction was an all–cash sale with no payoff lender and no new lender. Sandra was puzzled why there was a disbursement to a bank. She reviewed the settlement statement and it did not reflect the $550 disbursement at all.

Sandra decided to investigate the suspicious disbursement. She contacted the bank which was shown as the payee on the check and discovered the check was a car loan payment for the escrow officer's own loan! As she looked into more of the escrow officers closed files she discovered over $65,000 in disbursements to pay credit cards, mortgages and other personal bills. 

Because of Sandra's tenacious efforts the escrow officer has been terminated and legal action is being pursued. The affected files have all been reconciled and any overcharges and post–closing refunds have been distributed to the rightful owner.

The employee's defalcation has been reported to the local police, the Department of Insurance where she holds a title producer's license and the Secretary of State where she is a commissioned notary. As a result of Sandra's detection of a defalcation, the Company has rewarded her $1,000 and presented her with a letter of recognition on behalf of the Company.