An owner of Metro East Title Co. in Belleville pleaded guilty Friday to defrauding clients.
Karen Strasser Steinke, 65, of Millstadt, pleaded in federal court to one count of wire fraud and one count of structuring of financial transactions to avoid currency transaction reporting requirements.
According to court records, Steinke was a compulsive gambler and operated as a title insurance agent. She received money on behalf of others, which included escrow, settlement and closing funds. She was required to hold these funds in a fiduciary trust account. Court records reveal that Steinke removed funds from the escrow account to have money for gambling.
In October, an underwriter sued the title company and accused the business of failing to deliver almost $400,000 to the Columbia chapter of the American Legion after it sold land to the city. According to the lawsuit filed in federal court, Metro East Title Co. failed to pay the American Legion $385,000 of the proceeds from the sale, which closed Aug. 7 after the city paid $475,000 into an escrow account to cover the sale and fees.
That caused an underwriter to review Metro East Title Co.'s accounts, and the underwriter alleged that it discovered at least one other case of the company failing to deliver money to someone who sold a home. On July 16, the underwriter said a couple paid Metro East Title Co. $84,110 to cover the title and fees for the purchase. But when the payoff of $76,865 was sent to Wells Fargo Mortgage, the payment was refused due to insufficient funds.
Steinke could face a maximum sentence of 25 years in prison, three years of supervised release and a fund of up to $500,000 plus mandatory restitution. Sentencing is scheduled for May 2.