Fraud lawsuit filed against Heritage Oaks Bank and Stewart Title
June 15, 2009
By KAREN VELIE
Investors have filed a lawsuit alleging Stewart Title and Heritage Oaks Bank (HOB) aided and abetted and/or conspired with Hurst Financial Inc. (HFI) in defrauding hundreds of seniors through illegal investment schemes.
The suit filed by more than 300 investors against Stewart Title, HOB, and HFI lists eight complaints including conspiracy, fraud, financial elder abuse, and negligence. Investors are seeking punitive as well as compensatory damages.
Late last month, the FBI seized assets of (HFI) President Jay Miller’s home because of allegations of racketeering, money laundering, and wire fraud, according to a seizure warrant. The suit alleges HFI could not have engaged in a “Ponzi scheme” without the “joint effort, cooperation, and planning” of Stewart Title.
San Diego based attorneys Steven Sanchez and David Noonan, of the law firm of Kirby Noonan Lance and Hodge, claim that Stewart Title, working alongside HFI, siphoned money from investor loans to place in the pockets of HFI principles Miller and his daughter Courtney Brard. Sanchez cites examples of the title company creating false escrows, falsely closing active escrows, and illegally filing clean title reports before placing additional loans on already encumbered properties.
In addition, Stewart Title failed to notify investors when they discovered the fraudulent dealings following an internal audit and interviews that were spurred by numerous lawsuits and allegations of illegal activity.
More than 1,200 investors, primarily seniors, invested in excess of $100 million with HFI that is currently unaccounted for. According to the Department of Real Estate, Miller failed in his contractual agreement to protect investors by funding projects only as work was completed with progressive payments. Instead, he paid Gearhart in lump sums “without any monitoring of the construction.”
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