Industry News

State agency cracks down on escrow fraud

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The California Department of Corporations has formed the Escrow Fraud Task Force to coordinate fraud prevention and enforcement action by state and federal regulators, law enforcement, industry groups and businesses against fraudulent escrow companies operating on the Internet. There are about 650 independent escrow companies in California licensed by the Department of Corporations. The Department has taken enforcement actions against 33 Internet escrow providers to shut down fraudulent escrow sites since May 2004. None of these Internet escrow companies applied for licenses to operate legitimately in California. The Escrow Fraud Task Force will be lead by California Corporations Commissioner William P. Wood and a representative from the Federal Trade Commission, the FBI, the Southern California High Tech Task Force, the Los Angeles County Sheriff's Department and the Escrow Institute of California. "Internet escrow fraud is widespread. It is criminal," Wood said. "For the first t...