Washington State Department of Financial Institutions

News Release

Thursday, September 27, 2012

Contact

Lyn Peters, Director of Communications
PH (360) 902-8731 lyn.peters@dfi.wa.gov

Deb Bortner, Director Division of Consumer Services
PH (360) 902-0511 deb.bortner@dfi.wa.gov

FOR IMMEDIATE RELEASE:


Receiver Appointed To Take Over Hartman Escrow Of Tukwila

King County Superior Court appoints Orse & Co. as Receiver, with Karr Tuttle Campbell as Counsel, to operate and manage Hartman Escrow; Owner Lori Andrew agrees to cooperate after DFI discovers evidence of fraud

OLYMPIA – The Washington State Department of Financial Institutions (DFI) has obtained a receiver to take over Hartman Escrow, Inc., of Tukwila. DFI, which had taken control of the business and property on July 31, 2012, found it could not legally operate the company in the complete absence of a trust account. The receiver will be able to manage the affairs of the company subject to court supervision, and will not be limited by the absence of a trust fund.

Orse & Co., led by Eric D. Orse, President, is a workout company specializing in crisis management to preserve, maximize, and dispose of assets for the benefit of consumers and creditors. Karr Tuttle Campbell, a Seattle law firm, has extensive experience in receiverships. Attorney Diana K. Carey, Chair of Karr Tuttle’s Creditors’ Rights and Insolvency Practice Group, will provide legal services to Orse & Co. Carey and Orse have worked together on past high-profile bankruptcy cases, including Wade Cook Financial Corp. and Frederick Darren Berg, as well as numerous receiverships involving financial misconduct. Both Carey and Orse are trustees of CENTS (Consumer Education and Training Services), a non-profit which provides financial education to consumers in the Puget Sound area.

In the Petition seeking appointment of a general receiver, DFI identified some of its preliminary findings in the on-going investigation and examination of Hartman Escrow and its President and sole owner, Lori L. Andrew, including that Ms. Andrew had transferred more than $400,000 of Hartman Escrow assets to her personal bank account, including escrow trust funds; authorized more than $400,000 in non-business-related expenses; and converted more than $200,000 in escrow trust funds to her personal use.

“Upon discovering the misuse of consumer trust account funds in this case, DFI took extraordinary and immediate measures to protect consumers from additional financial harm,” DFI Director Scott Jarvis said. “It is our hope now, with a receiver in place, restitution will be complete for all affected parties.”

“Hartman Escrow has both Fidelity and Errors and Omissions coverage aggregating to $2,000,000, along with more than $1.4M in funds frozen by DFI,” Division Director Deb Bortner said. “Though DFI has already received more than $900,000 in consumer and creditor claims, we hope that with the appointment of a receiver those claims, and the others we anticipate being filed, will be paid in full.”

Consumer and creditors of Hartman Escrow, Inc. can file a claim with the Department at our webpage, www.dfi.wa.gov/consumers/alerts/hartman-escrow.htm.

Copies of the Department’s Orders entered in this matter are available online:

Copy of the Department’s filings in King County Superior Court also are available online:


About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: http://www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.

About Division of Consumer Services
www.dfi.wa.gov/cs ▪ 360.902-8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.

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