An article in the Dec. 18 Sunday Sun about title insurance agents reported incorrectly that William Hackney, a former lawyer in Glen Burnie, was convicted of stealing client money from an escrow account. In fact, earlier this year, in a civil proceeding in Anne Arundel County Circuit Court, Mr. Hackney signed a confessed judgment in which he acknowledged responsibility for $450,000 found missing from his title company's escrow account.
The Sun regrets the errors.
Joseph E. Goldberg Sr. raced off in his Ford Explorer Oct. 14 and hasn't been seen since.
The state and an insurance company say $2.3 million of his clients' money is missing from Land Title Research, the Ellicott City firm where he sold real estate title insurance and settled property sales.
FOR THE RECORD - CORRECTION
United General Title is suing him, and the state has launched a criminal investigation.
The Goldberg case is "one of the worst insurance nightmares" in Maryland history, affecting dozens of property transactions in virtually every county, Thomas P. Raimondi, a state insurance official, said during a court hearing Friday at which the state took over Land Title's remaining assets.
The missing money could mean big legal and financial problems for the buyers of these properties.
But even if Mr. Goldberg, 41, ends up convicted of criminal charges, there is little to prevent him from eventually returning to the same obscure but potentially lucrative business -- with perhaps the same access to millions of dollars changing hands in property transactions.
A Sun investigation has found that although thefts from the escrow accounts of those who sell title insurance and conduct property settlements are a growing problem nationwide, Maryland has been ill-equipped to do much about it. The investigation shows that:
* Some Maryland title agents convicted of stealing money from settlement escrow accounts or successfully sued for the same reason are back in the business today. The Maryland Insurance Administration, charged with regulating the title insurance business, has few means to prevent them from participating in real estate settlements.
* Even if state regulators did stop felons from returning to the title insurance business, the information required on applications for licenses to sell title insurance is skimpy and, until this year, was rarely verified. Furthermore, if a title firm is listed as entirely owned by lawyers -- as was Mr. Goldberg's company -- it doesn't need to have a license or tell the state who actually is handling its property settlements.
"It's simply outrageous when you have someone who's been convicted of stealing money from an escrow account back operating in the same business again," said Glen Jackson, head of Maryland Land Title Association, an industry group, and president of Sentinel Title, one of the Baltimore area's largest settlement companies.
Chris Romano, chief of the state attorney general's criminal investigations unit, has prosecuted numerous title insurance company employees charged with dipping into escrow accounts where they are supposed to hold clients' money temporarily -- and using the money for investments, vacation homes and luxury cars.
"It's a privilege to have a license to sell title insurance," Mr. Romano said. "When you steal escrow money, there has been a complete breach of trust to that privilege. I hate to use the cliche, but the foxes are being allowed back to guard the henhouse."
Mr. Romano, Mr. Jackson and others in the industry say the need for changes in Maryland's regulation of the title insurance business is highlighted by the case of Howard L. Perlow.
Mr. Perlow was a lawyer who operated a company known as Bay State Title for about 10 years. Before its collapse in 1989, it was one of the state's largest title insurance companies, at times running millions of dollars a month through its escrow account.
In 1989, investigators found that $1.6 million was missing from the Baltimore-based company's escrow account and had been used by Mr. Perlow to bankroll a Maryland estate, clothes, jewelry and a vacation home in Boca Raton, Fla.
Mr. Perlow pleaded guilty to stealing money from the escrow account and in 1990 was stripped by the Attorney Grievance Commission of his license to practice law.
At his sentencing in 1991, Baltimore Circuit Judge Edward J. Angeletti said the lawyer took a good career and "threw it all
The judge sentenced Mr. Perlow to 3,000 hours of community service and five years in prison with all but one year suspended.
He also barred Mr. Perlow from involvement in "any kind of transaction."
That order was later modified to prevent him only from handling "any funds associated with any real estate transaction or settlement" except money in his personal deals.
Today, Mr. Perlow is vice president at Residential Title & Escrow, a successful Reisterstown title insurance and settlement company.