A 61-year-old Alexandria man pleaded guilty Wednesday in federal court in Minneapolis to charges connected to a scheme to defraud mortgage lenders and others out of more than $800,000.
Dale Charles Dodge Jr. pleaded guilty to one count of wire fraud and one count of engaging in a monetary transaction with property derived from specified unlawful activity, commonly referred to as money laundering.
Dodge was indicted on September 15, 2009.
In his plea agreement, Dodge admitted that from 2002 through 2005, he operated a title closing company under the names Premier Title & Abstract, Inc., and Verity Title & Abstract.
As part of that operation, he maintained an escrow account, into which mortgage lenders regularly deposited loan proceeds for distribution at transaction closings pursuant to the terms of the real estate agreements.
He also contracted the services of a title insurer, who underwrote most of the real estate transactions closed through his company.
Title insurers, often called underwriters, are liable to lenders, borrowers, and others if escrow and other transaction funds are improperly disbursed.
The plea agreement goes on to state that between 2002 and 2005, Dodge executed a scheme to defraud mortgage lenders and others out of large sums of money by diverting loan proceeds from the escrow account at his title company.
The money was used for his personal benefit as well as the benefit of his company and others involved in the scheme, according to court documents.
Specifically, Dodge fraudulently removed the funds or caused the funds to be removed from the escrow account to pay his salary and the salaries of company employees in addition to other non-escrow business expenses, according to prosecutors.
Frequently, those expenses were paid through wire transfers from the escrow account to other accounts under Dodge's control, prosecutors said.
Dodge also admitted concealing these actions from his title insurer, mortgage lenders, and property sellers and purchasers, according to the plea agreement.
Dodge's scheme caused losses of more than $800,000, according to prosecutors. Approximately $844,000 is owed to one specific mortgage lender, who mistakenly deposited money into Dodge's escrow account.
An additional amount is owed to First American Title Insurance Company, Dodge's title insurer, which was required under law to pay certain outstanding escrow obligations for which Dodge was unable to pay.
Dodge faces a potential maximum penalty of 20 years in prison for wire fraud and 10 years for money laundering.