Why was Supervisor Nolan meeting Brian Madden for breakfast May 16, 2008 at 9am at O'Conee, like to be a fly on that wall!
Brian Madden, PRESIDENT OF TITLE INSURANCE AGENCY ARRESTED
FOR MISAPPROPRIATING MILLIONS OF DOLLARS.
United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY’S OFFICE
MAY 19, 2009 YUSILL SCRIBNER,
REBEKAH CARMICHAEL,
JANICE OH
PUBLIC INFORMATION OFFICE
(212) 637-2600
FBI
JIM MARGOLIN, MONICA McLEAN
PUBLIC INFORMATION OFFICE
(212) 384-2720, 2715
PRESIDENT OF TITLE INSURANCE AGENCY ARRESTED
FOR MISAPPROPRIATING MILLIONS OF DOLLARS
LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), and ERIC DINALLO, the Superintendent of the New York State Department of Insurance, announced that BRIAN H. 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: 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 connection 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-2- 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 connection 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. MADDEN is expected to be presented later today before United States Magistrate Judge GABRIEL W. GORENSTEIN, in Manhattan federal court.
Mr. DASSIN praised the investigative work of the FBI
and the New York State Department of Insurance.
Assistant United States Attorney AVI WEITZMAN is in charge of the prosecution.
MADDEN, BRIAN H 515 RECKSON PLAZA UNIONDALE, NY 11556 2,500.00 15-OCT-06 FRIENDS OF PHIL NOLAN 2006 11PG A Supervisor N/A MADDEN, BRIAN H 515 RECKSON PLAZA 5TH FLOOR UNIONDALE, NY 11556 2,500.00 15-SEP-06 FRIENDS OF PHIL NOLAN
LIBERTY FUEL & ENERGY 45 LAKEVIEW AVE BAY SHORE, NY 11706 1,000.00 13-JUN-08 FRIENDS OF PHIL NOLAN 2008 JULY PERIODIC B Supervisor N/A LIBERTY FUEL & ENERGY 45 LAKEVIEW AVE BAY SHORE, NY 11706 2,500.00 01-OCT-07 FRIENDS OF PHIL NOLAN 2007 32PG B Supervisor N/A LIBERTY FUEL & ENERGY 4 LAKEVIEW AVE. BAY SHORE, NY 11706 1,000.00 15-OCT-06 FRIENDS OF PHIL NOLAN 2006 11PG B Supervisor N/A LIBERTY TITLE AGENCY 515 REX CORP PLAZA UNIONDALE, NY 11556 1,500.00 22-APR-08 FRIENDS OF PHIL NOLAN 2008 JULY PERIODIC C Supervisor N/A LIBERTY TITLE AGENCY 515 REX CORP PLAZA UNIONDALE, NY 11556 2,500.00 10-JUL-07 FRIENDS OF PHIL NOLAN 2007 JULY PERIODIC B Supervisor N/A LIBERTY TITLE AGENCY LLC 515 REX CORP PLAZA UNIONDALE, NY 11556 5,000.00 25-SEP-07 FRIENDS OF PHIL NOLAN 2007 32PG C Supervisor N/A LIBERTY TITLE AGENCY LLC 515 REX CORP PLAZA UNIONDALE, NY 11556 2,500.00 01-NOV-07 FRIENDS OF PHIL NOLAN
Shuttered Liberty Title sued for embezzling funds
by David Winzelberg
Published: April 10th, 2009
Liberty Title President Brian Madden and former President Bill Clinton
One of Long Island’s largest and most well-connected title companies has been sued by its insurers for allegedly embezzling money from escrow accounts.
Liberty Title, which had $50 billion in closings and about 60 employees, shut its doors on Monday, the same day the lawsuit was filed against it in New York Supreme Court by four separate title insurance companies: Commonwealth Land Title Insurance, First American Title Insurance Company of New York, Chicago Title Insurance and United General Title Insurance.
The companies charge Liberty owners Brian Madden, his wife Elizabeth Madden and attorney Albert Yorio, with breach of contract, fraud, and “unjust enrichment arising out of a fraudulent scheme … to embezzle funds placed in escrow.”
When a property is purchased, the title company would set up an escrow account that could include loan, tax and insurance payments that the company would make on behalf of their client.
Calls to Madden and Yorio were not returned. But someone who answered the phone at Liberty’s White Plains offices said, “There is no more Liberty Title.”
Attorney Stephen Epstein of Garden City-based Jaspan Schlesinger in a statement confirmed that Liberty Title has ceased operation.
“The current real estate downturn, not news to anyone, the current economic crisis and some recently uncovered incidental issues have caused us to make this difficult decision,” Epstein said. “We are proceeding with an orderly winding up of the company’s affairs. It is our goal to resolve all issues that we have uncovered and we are actively pursuing this goal.”
Founded just seven years ago, Liberty held offices in Manhattan, RexCorp Plaza in Uniondale and White Plains. On its Web site, Liberty touts its involvement in major property closings such as Rockefeller Center, the Lipstick Building, 7 World Trade Center, the Citicorp Building, RexCorp Plaza and the Garden City Hotel.
Several members of the commercial real estate community were stunned to learn about the lawsuit and the charges leveled against Madden, who industry insiders said has been “extremely generous” in an assortment of philanthropic causes.
The Maddens gave more than $70,000 in contributions to political candidates in 2008, according to campaign finance records. Liberty has hosted events featuring former President Bill Clinton, former Sen. Alfonse D’Amato and other political luminaries.
Adam Skelos, son of State Sen Dean Skelos, R-Rockville Centre, is listed as a Liberty account executive.
Sources say Liberty’s employees and sales force have been looking for jobs at other title shops.
Attorney for the title insurers, Darren Traub of Herrick & Feinstein in Manhattan, didn’t return a call for comment.
JASPAN SCHESINGER HOFFMAN LLP 300 GARDEN CITY PLAZA GARDEN CITY, NY 11530 1,500.00 13-JUN-08 FRIENDS OF PHIL NOLAN JASPAN SCHLESINGER HOFFMAN 300 GARDEN CITY PLAZA GARDEN CITY, NY 11530 250.00 10-FEB-07 FRIENDS OF PHIL NOLAN JASPAN SCHLESINGER HOFFMAN 300 GARDEN CITY PLAZA GARDEN CITY, NY 11530 250.00 10-JUL-07 FRIENDS OF PHIL NOLAN JASPAN SCHLESINGER HOFFMAN LLP 300 GARDEN CITY PLAZA GARDEN CITY, NY 11530 1,000.00 15-OCT-07 FRIENDS OF PHIL NOLAN JASPER SCHLESINGER HOFFMAN LLP 300 GARDEN CITY PLAZA GARDEN CITY, NY 11530 200.00 08-OCT-06 FRIENDS OF PHIL NOLAN
JASPAN SCHLESINGER HOFFMAN LLP 300 GARDEN CITY PL GARDEN CITY, NY 11530 1,500.00 11-FEB-09 FRIENDS OF PHIL NOLAN 2009 July Periodic
JASPAN SCHLESINGER 300 GARDEN CITY PLZ GARDEN CITY, NY 11530 1,500.00 20-AUG-09 FRIENDS OF PHIL NOLAN 2009 11 Pre Primary
SHE WORKS AT JASPAN AND NOLAN HAS HER WORKING ON SIDE FOR TOWN ON PILGRAM STATE DEAL WITH WOLKOFF LICCIONE, MAUREEN 30 LAWRENCE DR BRIGHTWATERS, NY 11718 250.00 23-AUG-07 FRIENDS OF PHIL NOLAN LICCIONE, MAUREEN T 30 LAWRENCE DR. BRIGHTWATERS, NY 11718 250.00 25-AUG-06 FRIENDS OF PHIL NOLAN
WOLKOFF, GERALD 1 SEASCAPE LA QUOGUE, NY 11959 3,000.00 04-DEC-08 FRIENDS OF PHIL NOLAN WOLKOFF, GERALD 1 SEASCAPE LA QUOGUE, NY 11959 3,000.00 28-APR-08 FRIENDS OF PHIL NOLAN
CUTHBERTSON, Nolans friend from Huntington, DOES NOW ALL CLOSINGS FOR IDA AND NOLAN HAS HIM KEEP THE MONEY INSTEAD OF TOWN AS WAS ALWAYS BY AN ATTORNEY FROM THE TOWN WHOM WORKED DOING THIS FOR $60.00 AN HOUR CUTHBERTSON, MARK 434 NEW YORK AVE HUNTINGTON, NY 11743 750.00 25-APR-08 FRIENDS OF PHIL NOLAN
This is very troubling, whom does Mark Cutherson HUNTINGTON COUNCILMAN, use for closing titles from ISLIP IDA, all that revenue we loss too! WHY. But the relationship is troubling on LIBERTY TITLE and NOLAN.
ALCUS FUEL OIL & SONS 238 BROADWAY AMITYVILE, NY 11701 2,150.00 11-FEB-09 FRIENDS OF PHIL NOLAN
