News

Settlement Officer Sentenced for Diverting Funds Intended to Pay Off Mortgage Lenders


Stole Over $877,000 in Just Three Months

FOR IMMEDIATE RELEASE
December 8, 2008

Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Marny Arlen Bailey, age 35, of Highland, Maryland, today to 21 months in prison followed by five years of supervised release for 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. Judge Motz also ordered that Bailey pay restitution of $877,000, to the title company who paid off the homeowners’ loans after the fraud was discovered.

According to the statement of facts, Bailey owned Executive Settlements, dba Superior Settlements, a company which handled residential real estate closings. Whenever real property that was subject to a lien or mortgage was sold or refinanced, Executive Settlements, and Bailey, were obligated to pay the original mortgage lender out of the proceeds of the transaction.

Beginning in late 2007 or early 2008, Bailey used funds which were intended to pay off mortgage lenders for her own purposes. In early 2008, she diverted whole settlement amounts to her personal accounts, and started gambling in an attempt to recoup 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 over $877,000.

Bailey was arrested by the FBI on May 23, 2008 in Atlantic City, New Jersey, where she was living in casinos and gambling.

United States Attorney Rod J. Rosenstein commended the Federal Bureau of Investigation for its investigative work and thanked Assistant U.S. Attorney Barbara S. Sale, who prosecuted the case.

 

 

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