A Highland Park man has been indicted on federal fraud
charges for stealing half a million dollars of his clients’ money and spending
it on himself, including to pay for parking tickets and condo renovations,
according to a release from the U.S. Attorney’s Office.
Derek Lurie, 40, ran American Escrow in Chicago until it collapsed in 2009, prosecutors say. He was indicted Wednesday on five counts of mail fraud. Prosecutors say he also engaged in a Ponzi-type scheme to make client payments.
In a separate indictment earlier this month, American Escrow employee Jacqueline Cruz, formerly of Highland Park, was indicted for taking more than $400,000 from the company.
In the Lurie case, he is accused of fraudulently managing more than $5 million in customer escrow funds, having promised to make tax and insurance payments for clients. Instead, prosecutors allege, he used more than $550,000 on personal expenses, such as parking tickets, car payments, renovations to a Miami condo and funding for other business interests.
Because he was running the company at a deficit, Lurie used a Ponzi-type payment system to pay earlier customers’ tax and insurance bills with more recent customers’ escrow funds, the press release explains.
Cruz, 38, who now lives in Japan, was responsible for accounting, issuing checks and overseeing customer payments for the company. Between 2005 and 2009, prosecutors say she wrote more than 100 company checks to herself for a total of more than $400,000.
Cruz pleaded not guilty to three mail fraud charges earlier this month. Lurie will be arraigned March 11, the release says.
Each mail fraud charge can result in up to 20 years in prison and a $250,000 fine.