Lawsuit: Title agent mishandled $5.6M
A Lehigh County title agent misappropriated more than $5 million in funds from his clients, a lawsuit filed late last month alleges.
Fidelity National Title Insurance Company filed a lawsuit Sept. 29 in Lehigh County Court against Louis Belletieri, alleging he mishandled $5.6 million of his clients’ funds.
Belletieri owned Allentown-based Legacy Title, and caused an escrow shortage in excess of $5.6 million, according to the lawsuit.
“The escrow fund at issue were deposited with Legacy Title by lending institutions and others and were not properly disbursed to pay off mortgages and other charges,” Fidelity attorney Caitlin Strauss wrote in court documents. “Rather, the escrowed funds were transferred by Belletieri to other accounts, including Belletieri’s personal bank account for personal use.”
Fidelity, a title insurance underwriter, discovered the alleged misappropriation in mid-September when a seller contacted them alleging his prior mortgage had not been paid in a closing handled by Legacy Title.
Fidelity tried contacting Legacy Title and Belletieri multiple times for an audit, but were unsuccessful. His attorney told them Legacy Title was closed and would stop operating in late September, according to court documents.
Fidelity requested numerous documents and information to perform an off-site audit, and they were given one bank reconciliation document for Legacy Title’s escrow account as of August.
That account showed it was short at least $5,642,407, the lawsuit states. Belletieri also did not provide Fidelity with any other requested documentation, which was in breach of Belletieri’s and Legacy Title’s fiduciary duties, the suit alleges.
As of late August, Legacy Title had failed to disburse mortgage payoffs for at least five properties, three of which are located in Lehigh County, according to court documents.
The suit alleges Belletieri lost millions of his personal funds from online sports gambling, and he continued his gambling using funds from Legacy Title’s escrow account.
Some of the money was also used in the purchase and sale of precious metals, including gold bars and coins, according to the lawsuit. Those seemingly have no relationship to a real estate transaction, Strauss wrote in the lawsuit.
Fidelity is aware of at least 20 claims or inquiries under title insurance products issued on its behalf by Legacy Title, according to the filing.
Fidelity is seeking monetary damages as well as access to and production of all relevant title insurance records, settlement files, correspondence and escrow account records.
A message left with Legacy Title’s listed number seeking comment was not immediately returned Tuesday.
Belletieri is expected in court Thursday morning for an evidentiary hearing.
Asked if Belletieri is the subject of any criminal investigation, Lehigh County District Attorney Jim Martin said his office does not comment on whether there is or is not an investigation.