Escrow Accounts: Fertile Ground for Fraud and Malpractice

The definition of escrow is “a financial instrument held by a third party on behalf of the other two parties in a transaction.” Most often used in real estate transactions, an escrow account holds money intended to be dispersed to fulfill certain conditions set forward in a contract or other agreement. Money in an escrow account is perceived by most people to be “untouchable” but all too often money is pilfered by untrustworthy persons.

Escrow accounts can be managed by attorneys, real estate brokers, mortgage brokers, or other professionals and when they are violated it usually involves fraud. It most likely involves malpractice as well, and if you are the victim of escrow account abuse, you would be wise to seek legal advice.

A lawyer was busted for stealing more than $100,000 from about 15 different clients he won settlements for, prosecutors said Tuesday. Kenneth Gellerman, 57 – who was already suspended from practicing law last year for misusing his clients’ settlement cash – allegedly deposited settlement checks into his own accounts and even settled cases without telling his clients and kept the money.

“This defendant allegedly stole from numerous people who had suffered injuries in car accidents or falls and needed their settlement money, in some cases while he was suspended from practicing law,” DA Ken Thompson said in a statement. “We will now seek to vindicate the rights of these victims.”

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