Prior Lake ex-insurance agent admits misusing $470,000

Star Tribune

Last update: October 27, 2009 - 8:56 PM

A Prior Lake woman has admitted that she misappropriated more than $470,000 in fees from hundreds of property transactions and failed to file accurate 2007 income tax forms, and state records indicate that she was spending tens of thousands of dollars at the time at a casino less than 2 miles down the road.

Roseann Wagner, a former insurance agent, owned and ran Tri-Star Title Inc., a Richfield company that acted as an agent for Stewart Title Guaranty Co., a title insurance underwriter based in Houston. She pleaded guilty last week in federal court in St. Paul and awaits sentencing.

Title insurance protects a lender from losses due to title defects, liens or other encumbrances on the title. A typical home buyer would pay the title insurance premiums, included among other closing costs, with money borrowed from the lender. The lender distributes the money to a closing agent who's responsible for paying the title insurance premiums, title search and recording fees.

Wagner, for most of 2007, failed to make those payments on hundreds of real estate deals, potentially wrecking them, according to prosecutors. Wagner allegedly used the money that was supposed to go to settle the transactions for personal expenses. She allegedly wired the money from a Tri-Star account to her personal account, and didn't include the money on her tax returns.

In the spring, when a state administrative law judge recommended that Wagner's insurance producer's license remain suspended, a "finding of fact" document said that Wagner withdrew $98,000 in cash from Mystic Lake Casino. The withdrawals were made either at ATMs in the casino or by writing checks to "cash" and endorsed by the casino.

PAUL WALSH