Virginia Attorney Whose License Was Revoked After Firm Wrote Bad Checks For Huge Sums Convicted In Ponzi Scheme; Troy Titus Faces Up To 590 Years In Prison

ponziblotterThese are some trying times for the legal profession. Disbarred Florida attorney Scott Rothstein is implicated in an alleged $1.2 billion Ponzi fraud in which prosecutors said attorneys from his shuttered, 70-attorney firm in Fort Lauderdale were getting paid from Ponzi proceeds that flowed from bogus “settlements” in cases involving sexual harassment or sexual infidelity.

And now a federal jury in Virginia has found former attorney Troy A. Titus, 43, guilty of running a real-estate Ponzi scheme and other fraud schemes that fleeced clients out of more than $7 million.

Titus was found guilty of 33 charges. He faces up to 590 years in prison. Sentencing is scheduled April 15 before U.S. District Judge Raymond A. Jackson.

“[A] jury found Troy Titus stole millions from people who trusted him to protect their investments,” said U.S. Attorney Neil H. MacBride of the Eastern District of Virginia. “[His] conviction is a testament to the ability of our law enforcement partners to tackle complicated investment and mortgage fraud cases. Especially in the light of the recent economic crisis, we are even more determined to work together to aggressively fight financial fraud in this district.”

A veteran FBI agent said enough is enough.

“[W]e will continue to target those who, motivated by greed, prey on honest investors and damage our country’s financial confidence,” said A.J. Turner, special-agent-in-charge of the FBI’s Norfolk field office.

Titus’ law license was revoked by the Virginia State Bar in 2005 after an investigation revealed a continuing pattern of writing bad checks for tremendous sums. Between November 2002 and May 2005, according to records, Sun Trust Bank and Monarch Bank notified both Titus and the Virginia Bar about 15 overdrafts on accounts Titus had the responsibility of maintaining.

The Virginia Bar, which initially gave Titus an opportunity to right the ship after he explained that his accounting systems lacked controls and that he had taken corrective measures and hired a CPA, later determined he had engaged in a continuing pattern of “ethical misconduct” when more bad checks surfaced.

Even after the CPA produced evidence and showed Titus in August 2004 that statements reflected that a key Titus account had a balance of $2.177 million, that checks totaling $4.746 million had been written on the account and that the account had an adjusted negative balance of $2.569 million, Titus pooh-poohed the situation and continued to overdraft the account by tremendous sums.

Titus eventually was charged criminally. In March 2009, a superseding indictment was issued by a grand jury, accusing Titus of dozens of counts of fraud, including Ponzi fraud.

“Titus approached clients or seminar participants and induced them into investing money with him to purchase and rehabilitate real estate, promising to return the money at a later date with a high rate of interest,” prosecutors said. “However, Titus obtained many of the real properties involved through fraud or transferring the properties into trusts controlled by him. Instead of using the funds as promised, Titus directed the investment income toward paying business or personal expenses, backfill investment losses, and at times to make token payments or repay previous investors.”

The disgraced lawyer also took advantage of “elderly or incapacitated clients who provided him with income intended to be held in trust and took steps to conceal those uses from those who inquired about the management of the trust,” prosecutors said.

Trial evidence and testimony “showed that Titus failed to make payments for the trust clients’ basic medical and housing needs,” prosecutors said. “Titus engaged in a similar scheme to defraud involving real estate closing funds he held in trust.”

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2 Responses to “Virginia Attorney Whose License Was Revoked After Firm Wrote Bad Checks For Huge Sums Convicted In Ponzi Scheme; Troy Titus Faces Up To 590 Years In Prison”

  1. Remember the good ole days when you could trust your attorney, accountant, financial adviser, pastor, insurance agent, and other professionals without any worries they were scamming you?

    From the stories that have appeared here, as well as in other publications that has all changed in the last year. You have seniors scamming seniors, and if that was not bad enough, you now have their ‘trusted professional advisers’ they cannot trust.

    Now you have to check out your professionals you rely on for guidance as much as you do any investement program to make sure you are not getting into a Ponzi or a scam. It seems today you cannot trust anyone any more. What is worse, they seem to have no remorse for their actions, all the grief and sorrow they have caused, as well as financial ruination of seniors that are supposed to be their “golden years.” They have turned their ‘golden years’ into one giant nightmare and horror story.

    I sincerely hope the latst trends we have seen by the Judge’s throwing the book at them continues. Maybe, just maybe this will make a few stop and think before they start their scams if they know there is a serious price to pay. One can hope.

    There is another scam that was run out of Louisiana called Thirty Dollar Unit, or TDU for short that failed to make their promised payments between 12-18 and 12-22. Now it is up to the Louisiana authorities to take action against the perps of this scam. Their prey? Why senior citizens and Christians of course. And by the way, one of the perps in this is believed to be an attorney. So another hit to the legal profession if this is true. We were warning the Louisiana AG back in October of last year about this scam, and have assisted with providing information we hope will lead to an arrest soon. They were just waiting for this to collapse on its own so they could not blame the “evil” government for its demise. Personally I would like to see all the players behind TDU spend Christmas in jail. I think it is only fitting if they did.

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  2. Lynn’s comments on the trustworthiness of professionals is very apt.

    We have Attorney Robert Garner infamous legal statement on ASD, which was instrumental in catching members. Without Attorney Larry Friedman’s statement that ASD was not a ponzi, Bob Guenther’s ASDMBA would never have raised a cent. Legal and Accounting “professional” advisers, such as “professor” Patrick Moriarty, are now a popular feature of the promotion of less than legal activities all over the internet.

    The Maddoff ponzi was run by banking and accounting professional of the highest possible reputation.
    This is a partial list of the “professionals” in just two ponzis, but is a sad and accurate reflection of the ponzi world at large

    We now seem to be seeing the birth of a new era in the prosecution, internationally, of this white collar crime, which is a step in the right direction. That, combined with the new public awareness of the existence of the ponzi, can only bode well for the future.

    If every cloud has a silver lining, then the Maddoff and ASD affairs have brought about a greater awareness of offline and online financial fraud.

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