A federal judge has sentenced a Florida title company owner to 27 months in prison after he pleaded guilty to embezzling mortgage lenders' funds.

Jonathan Yasko, 47, of Winter Springs, Florida, committed wire fraud between 2021 and 2023, diverting lenders' funds in real estate transactions to other accounts, according to prosecutors. That included using the money for other unrelated closings, because of shortfalls in those escrow accounts, or to Yasko's own account to pay for cars, home renovation projects, personal travel and other personal expenses.

In one transaction involving First American Title Insurance Co., Yasko diverted $201,000 in lender funds to cover the payoff of an unrelated settlement, causing First American to suffer a title insurance loss of $288,843, according to a criminal information filing. U.S. District Judge Julie Sneed in her sentencing last week ordered Yasko to pay $201,004 in restitution.

Yasko's activity resulted in numerous botched closings involving loans purchased or owned by Freddie Mac, according to the U.S. Attorney's Office for the Middle District of Florida and the Federal Housing Finance Agency's Office of the Inspector General. The title industry figure, who was charged last April, tried to conceal his activity, feds said.

The companies Yasko ran include Entrust Solutions, Capital Land Settlements, and Global Partners Settlements. 

Sneed also sentenced Yasko to three years of supervised release. According to a sentencing memorandum prepared by his attorney, Yasko claims to have already paid $23,000 toward his restitution. 

An attorney for Yasko declined to comment Tuesday.

Fraud and forgery risk rising

Title insurance claims resulting from fraud or forgery average over $206,000, according to research by the American Land Title Association and Milliman last November. That figure compares to a mean cost of over $30,000 for other types of title companies' loss, according to an analysis of claims data between 2014 to 2023. 

The risks come as title insurers may be gearing up for more stringent reporting requirements, with a rule by the U.S. Treasury Department's Financial Crimes Enforcement Network, or Fincen, set to go into effect this March. A federal judge in December recommended the rule stand despite a challenge from Fidelity National Financial, and a final ruling on the rule remains pending.