A Title Agent Turned Swindler? It’s Not Unheard Of.

Ryan Goodrich, now a convict, used to be a trusted deed expert.

For years, Goodrich ran a title company. Behind the scenes, Goodrich stole millions of dollars from home sellers and buyers, their mortgage lenders, and even peers in the title industry, said Utah officials. The activity, they alleged, involved sending people falsified receipts for money wires that never really occurred. It also involved frequently reassuring his targets that everything was fine.

Big Spender

Ryan Goodrich pocketed the funds he was supposed to transfer to clients.

The case for the prosecution claimed that Goodrich moved $115 million over the course of two years, and $23 million of that couldn’t be traced, due to missing records. Officials did trace more than a million and a half dollars spent on things like workout equipment, restaurants, and pricey entertainment.

On behalf of at least 22 victims, the office of Utah’s Attorney General pressed felony charges. Goodrich will spend something between three and 40 years sitting in prison.

Title abuse and bad checks were only part of the story. Goodrich faced more legal actions for taking people’s money while working (or, actually, not doing the work) as an unlicensed contractor. And then there were the charges over stolen goods from multiple stores, including Costco, Home Depot, and Walmart.

“What I did was not right or fair…” Goodrich said, before insisting: “I actually have a huge heart for everyone, which is one of the many reasons I want to get these victims paid back as soon as possible.”

Sprawling Spree

The prosecution alleged a crime spree that harmed families and entire businesses:

• Several people sold their homes to Goodrich. They were shocked to learn later that their mortgage balances were left unpaid. One of these deed holders was ultimately left living in his truck, his credit profile devastated.

• Another client tried to deposit a bad check from Goodrich — a bogus payment for his home.

• When one of the victims tried to rebound from the damage done by starting a small business, Goodrich reportedly went and bashed it on review sites.

• A title company transferred funds for a $1.6 million home to Goodrich, who kept the money. He forged the seller’s signature to convey the deed to himself. And then he borrowed against the title.  

Now, the owner of a small title insurance agency fears his business may be wrecked. The title company is mired in civil cases over the losses he says Goodrich caused.

Greed, Pride, and Ego

Even the former Utah State Real Estate Commission chair lost $300,000 to one of Goodrich’s scams.

The perpetrator’s lawyer acknowledged his client’s “greed, pride, ego, desperation and digging himself deeper” while trying to cover his tracks. But the lawyer also pointed out that the crimes were not violent, and that there would be no way for the accused to earn money to pay people back if he were incarcerated. The judge wasn’t persuaded. A clear message had to be sent, not a slap on the hand.

Judge Ronald Russell, who highlighted the importance of trust in deed transactions, told the dishonest agent: “You abused your position of trust as a fiduciary in an industry that needs to have credibility.”

Sounds like the understatement of the year.

Gang of Four

In other recent news, a group of title insurance firms active in the District of Columbia were found giving real estate agents discounted stakes in their firms’ profits as rewards for client referrals, D.C. Attorney General Brian Schwalb told the press.

“They tried to go through the back door,” A.G. Schwalb said. Schwalb explained that the group established shell companies, so they could issue shares in them to agents. Then they funnelled money through these companies, making them look like legitimate dividends.

And one of the firms, Allied Title & Escrow, allegedly set up Chesapeake Bay yacht excursions for real estate agents, to reward them for their referrals.

Rewards for client referrals constitute conflicts of interest. Of course, agents are free to suggest title insurance companies for transactions. But they may not accept rewards — money, perks, or fees — for suggesting anyone.

Title insurers offer policies to lenders — and, optionally, to home buyers. With a title policy, financial responsibility for any defect in the title can be covered.

Mortgage borrowers can lose out if they’re steered to companies that reward their real estate agents. A typical home buyer won’t know what’s going on. Most will accept the agent’s preference rather than do comparison shopping.

Payback Time

In settling the case against them, the companies did not admit guilt. They have agreed to penalties of more than $3 million, payable to the District of Columbia. Per the agreement:

• Allied Title & Escrow pays $1.9 million.

• KVS Title pays $1 million.

• Union Settlements pays $325K.

• Modern Settlements pays $65K.

D.C. officials told the media that $2 million of the settlement will go to deed holders who may have overpaid for title policies. The firms agreed to avoid improper practices in the future. They are also required to divest the shares from the real estate agents — or else, stop operating in the District.

A KSV Title representative told News4 that the distribution of shares didn’t cause harm to consumers. KSV, said the rep, determined its best interests would be served by settling the case. A spokesperson for Modern Settlements similarly said the company’s leaders “made a business decision” to cough up $65K and avoid bigger losses in the court process.  

Harmed by Deceptive Practices?

If so, can you pursue a legal action for fraud? Speak with a lawyer in the state where the activity occurred. A lawyer can write up the legal documents necessary to pursue a fair resolution.

States’ laws protect consumers, and deter deceptive business practices. Especially in cases where a harmful deception happened on purpose, a customer may be able to get 3X the damages awarded by a court (“treble damages”). Note that the statute of limitations for fraud or breach of contract varies by state.

You may also call the police, and your state attorney general’s consumer protection officials. Keeping title transactions safe and deterring fraud helps us all — including the many good title agents out there.

Please note: This article does not substitute for an attorney-client relationship, or the legal expert’s case-specific guidance.