Settlement Officer Pleads Guilty to Diverting Funds Intended to Pay off Mortgage Lenders
Stole Almost $1 Million in Three Months
Baltimore, Maryland - Marny Arlen Bailey, age 35, of Highland, Maryland, pleaded guilty today to wire fraud in connection with a scheme to steal real estate settlement funds which were intended to pay off the homeowners’ previous loans, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
According to the statement of facts, Marny A. Bailey was the head of Executive Settlements, dba Superior Settlements (Executive), a company which handled residential real estate closings. Whenever a piece of real property that was subject to a lien or mortgage was sold or refinanced, it was the obligation of Executive and Bailey, as its principal and owner, to see that the original mortgage lender was paid out of the proceeds of the transaction.
Beginning in late 2007 or early 2008, Bailey began taking funds which were intended to pay off mortgage lenders at closing and using the money for her own purposes. In early 2008, she diverted whole settlement amounts to her accounts, and started gambling in an attempt to make back the amounts she had stolen. When the bank where Bailey had her escrow account advised her to take her business elsewhere, Bailey transferred the balance in her escrow account, over $184,000, to an operating account, and spent it. In February and March of 2008, she stole settlement monies from as many as four homeowners, for a total of just under $1 million.
Bailey was arrested by the FBI on May 23, 2008 in Atlantic City, New Jersey, where she was living in casinos and gambling.
Bailey faces a maximum penalty of 30 years in prison and $1 million fine for wire fraud. U.S. District Judge J. Frederick Motz has scheduled sentencing for December 8, 2008 at 9:00 a.m.
United States Attorney Rod J. Rosenstein commended the Federal Bureau of Investigation for its investigative work. Mr. Rosenstein thanked Assistant U.S. Attorney Barbara S. Sale, who is prosecuting the case.