DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced Tuesday that a statewide grand jury indicted Quantum Title Tuesday after the company allegedly defrauded investors of more than $3 million before getting caught.
Quantum Title, Michael Martinez, the company's owner, and Kathy Norman, the company's accountant, allegedly ran a Ponzi scheme by purposely taking money funded for closings and using it for other means, relying on future fundings to pay off older transactions. After Quantum Title ceased operations in July 2011, claiming it was unable to meet escrow obligations, the Colorado Division of Insurance looked into the company's actions. The division alleged that approximately $3 million was missing from Quantum Title's escrow account.
While looking into Quantum Title's actions, Suthers' office learned that the Federal Housing Finance Agency and Freddie Mac were looking into Martinez for possible mortgage fraud related to other investment companies he owned. The FHFA and Freddie Mac turned over the inquiry to Suthers' office. Suthers' office alleged that Martinez, Norman and Ben Velasquez used deceptive information to gain the mortgages of three properties from lenders.
Martinez and Norman were indicted on one count of theft over $20,000 and one count of theft over $15,000. Velasquez was indicted on one count of theft over $20,000 and two counts of forgery.
If convicted, Martinez, Norman and Velasquez could face between four and 12 years in prison, in addition to restitution.
Colo. AG announces indictment against Quantum Title
