By Lydia Wheeler
lydia.wheeler@insidebiz.com
A Virginia Beach attorney is scheduled to be sentenced in federal court in October for misappropriating more than $2.3 million in escrow funds.
David Flynn, who owns Assured Title of Virginia LLC at 5267 Greenwich Road in addition to his law firm at the same address, pled guilty in April to one count of mail fraud and one count of unlawful monetary transactions. He remains free on $25,000 bond.
According to court documents, Flynn failed to make mortgage payments for more than 12 clients who hired him to either close on a real estate transaction or refinance property between Sept. 13 and Dec. 31.
The 44-year-old Norfolk resident is also the subject of a civil suit with First American Title Insurance Co. The civil suit filed in December accuses Flynn of failing to properly maintain separate escrow accounts for real estate closings and pay deeds of trust from the proceeds of the real estate closings.
The U.S. Attorney's Office filed the criminal charges in the Norfolk Division of the U.S. Eastern District Court of Virginia in April.
The filing said, "Flynn executed his scheme and artifice to defraud by receiving substantial sums of money to complete real estate transactions into his escrow accounts and then misappropriating those funds for his own personal benefit."
Listed in the charges was Cassandra Walbert's first mortgage payment of $109,797 that went unpaid after she hired Flynn to close on property she was refinancing in Norfolk and $26,124.54 he owed her in equity proceeds she never received.
A $26,406.81 check Flynn sent to Robert and Emma Moyers after closing on the sale of their home couldn't be cashed, according to the filing, because of insufficient funds in Flynn's real estate escrow account. Jessica's Mason's first mortgage payment of $390,978.24 was never paid, another of several transactions listed in the filing.
Several of Flynn's clients were forced to make payments to keep from damaging their credit, the court document said.
According to the plea agreement, Flynn must forfeit all of his bank accounts. He
had at least six accounts with TowneBank and one account with Wells Fargo, records show.
TowneBank and Wells Fargo did not respond to questions by press time about safeguards for escrow accounts or changes in policy because of the case.
Flynn is scheduled to be sentenced Oct. 14 by District Judge Henry Morgan Jr.
He faces a maximum sentence of 20 years in prison, a $250,000 fine and three years of supervised release for one count of mail fraud and 10 years in prison, a $250,000 fine and three years of supervised release for two counts of unlawful monetary transactions.