Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
July 02--GULFPORT -- A Biloxi attorney and businessman was sentenced Tuesday to a five-year prison term and ordered to pay more than $8 million in restitution for defrauding two banks and the U.S. Bankruptcy Court.
U.S. District Judge Sul Ozerden also ordered Stephen Richard Colson, 48, to serve three years of post-release supervision and to pay a $100 special assessment.
Colson pleaded guilty in March to falsifying, concealing and covering up material facts in his business and legal dealings.
Colson, as the owner of Prestige Title Inc. and Advanced Title and Escrow, was a settlement agent and closing attorney, with business headquarters in Biloxi. He has other offices in Mississippi and in Alabama, Florida, Georgia, Louisiana and Texas.
Colson also was an escrow agent for condominium developments in South Mississippi.
As a part of his responsibilities as a settlement agent, he was required to set up trust accounts to disburse money from individual loans.
A federal investigation showed he had diverted money from trust accounts into personal accounts and hidden any shortages in the accounts by co-mingling funds from other accounts when he made payments to financial institutions, according to a joint press release from the U.S. Attorney's Office and FBI.
The scheme, officials said, began in summer 2004 when Colson obtained a mortgage loan using property in his name as collateral.
Colson issued a loan policy on that mortgage and later sold the property for cash but did not inform the bank that held the lien, according to the charging document.
He continued to make a mortgage payment until the sale was discovered when he filed for bankruptcy in September 2009. He sold the property for cash Sept. 15, 2005.
A title insurance company later paid $133,600 to settle the claim.
Officials said Colson was involved in a larger scheme of using money from new real estate closings to pay off earlier closings. Colson had served as the agent of a title insurance company that later changed hands, and an audit revealed his title companies had a shortage in money for settling real estate closings.
As a result, officials said the title insurance company that took over was forced to pay 54 claims from lenders, borrowers and sellers and won a claim against him in Bankruptcy Court.
The Bankruptcy Court determined the use of his trust account was "akin to a Ponzi scheme in that Colson depended upon funds generated in new real estate closings to pay off earlier closings."
The FBI investigated the case. Assistant U.S. Attorney Jay Golden prosecuted the case.
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