ATLANTA – A federal indictment unsealed today charges Nathan E. Hardwick IV and Asha R. Maurya with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives.  In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses.

“The indictment alleges an embezzlement scheme dating back years,” said U.S. Attorney John Horn.  “Along the way, Mr. Hardwick is alleged to have repeatedly lied to his clients, law partners, banks and others.  The allegations are especially troubling given that the actions were orchestrated by a lawyer who swore an oath to uphold the law and to represent his clients with integrity.”

“The magnitude of theft as alleged in the federal indictments of these two defendants clearly merited the resulting federal investigation and prosecution.  The allegations describe a trusted corporate officer and attorney in personal financial troubles conspiring with another corporate officer to steal from their employer, primarily through escrow accounts entrusted to their company.  Today’s federal grand jury indictments will now move those allegations into federal court,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated.

According to U.S. Attorney Horn, the indictment, and other information presented in court:  Morris Hardwick Schneider and LandCastle Title (“MHS”) was a law firm and title insurance agency headquartered in Atlanta, Georgia.  MHS employed approximately 80 lawyers and 800 non-lawyer employees in 16 states.  MHS’s law practice specialized in residential real estate closings and default and foreclosure matters.  MHS’s title insurance business involved selling title insurance policies in connection with residential real estate closings.

During periods of high activity in the real estate market, MHS performed thousands of residential real estate closings per month, and received hundreds of millions of dollars in closing funds that it was required to hold in trust in attorney escrow accounts until disbursed in accordance with its clients’ closing instructions for each transaction.  At any given time, a single MHS attorney escrow account might contain millions of dollars.  MHS also had operating accounts for purposes of funding its operations.  MHS’s accounting and escrow account operations were based out of the firm’s Atlanta headquarters.

From MHS’s formation in 2005 until Hardwick’s resignation in August 2014, Hardwick served as managing partner of the law firm and Chief Executive Officer of the title insurance agency.  Hardwick was also the majority shareholder of MHS.  Hardwick worked out of MHS’s Atlanta headquarters, supervised virtually all of MHS’s day-to-day operations, and had virtually unlimited access to, and control over, MHS’s financial affairs.

Maurya was an accounting department employee of MHS from April 2009 until her termination in November 2014.  Maurya was hired to be MHS’s Escrow Account Controller and was eventually promoted to the position of Chief Financial Officer of MHS’s closing division.  Maurya managed MHS’s attorney escrow account operations and other accounting operations under Hardwick’s supervision.

Hardwick allegedly began experiencing severe financial problems in the late 2000s, when a sharp decline in the residential real estate market made MHS less profitable, and he was subject to a July 2008 divorce decree requiring him to pay his ex-wife over $550,000 per year in alimony and other payments for five years.  Hardwick’s legitimate income could not keep pace with his lavish lifestyle, which included private jet travel; multi-million dollar homes; high-end retail goods and services; gambling at casinos in Louisiana, Mississippi, New Jersey, and Nevada; and payments to bookies and girlfriends.

The Alleged Embezzlement Conspiracy

To maintain the illusion of wealth and success despite his financial problems, and to continue to live beyond his means, in or about 2011, Hardwick allegedly began directing Maurya to make millions of dollars in shareholder distributions, bonuses, and other payments for Hardwick’s benefit, directly out of MHS’s bank accounts, in amounts that exceeded the share of MHS’s profits to which Hardwick was entitled. This occurred at times when no shareholder bonuses or distributions were scheduled to be made, and without causing or directing proportionate bonuses or distributions to be made to the other MHS shareholders.  The excess bonuses, distributions, and payments to and for Hardwick’s benefit included payments to casinos, private jet charter companies, credit card issuers, and other creditors and accounts.

To fund the vast majority of these illicit payments, Hardwick and Maurya allegedly caused millions of dollars to be wire transferred to and for Hardwick’s benefit out of MHS’s attorney escrow accounts.  Hardwick and Maurya fraudulently concealed Hardwick’s excess payments from the other MHS shareholders, MHS employees, outside auditors, title insurance underwriters, and others through false statements, half-truths, and by the omission of material facts, and by distributing false and misleading financial information and records.

According to the indictment and based on information presented in court, when other MHS shareholders, MHS employees, and one of MHS’s title insurance underwriters began to uncover the conspiracy in July and August 2014, Hardwick and Maurya took further steps to conceal the illicit payments and to delay and obstruct the discovery of their scheme, including by making false statements about the nature, amount, and cause of the excess payments and any resulting escrow account shortages.  In particular, Maurya allegedly provided excuses and denials that attempted to attribute any problems to bank error.

Before the other MHS shareholders and employees knew the full extent of the scheme, Hardwick also allegedly tried to conceal the amount of his illicit payments and the severity of the resulting escrow account shortages by lying to obtain and to attempt to obtain loans from various individuals and entities to repay part of the money that he had stolen.

The indictment also charges Hardwick with lying to obtain over $3.5 million in loans from federally-insured banks in 2009, 2011, 2013, and 2014.

Maurya’s Alleged Embezzlement

In addition to charges against Maurya for her assistance with Hardwick’s alleged theft of over $20 million, the indictment charges Maurya separately with a scheme to defraud MHS by tricking MHS into issuing checks to pay off her personal credit card bills.  Maurya is alleged to have diverted over $900,000 from MHS’s attorney escrow accounts and operating accounts to pay off her credit card bills and home mortgages.

Overview of The Charges

The indictment charges Hardwick and Maurya with one count of conspiracy to commit wire fraud and 18 counts of wire fraud.  It charges Hardwick with one count of bank fraud and three counts of making false statements to federally-insured financial institutions.  The indictment charges Maurya with 11 counts of mail fraud.  The conspiracy, wire fraud, and mail fraud charges against Hardwick and Maurya each carry a maximum sentence of 20 years in prison and a fine of up to $250,000 per count.  The bank fraud and false statements charges against Hardwick each carry a maximum sentence of 30 years in prison and a fine of up to $1 million per count.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

A federal grand jury in Atlanta returned the sealed indictment against Hardwick, 50, formerly of Atlanta, and Maurya, 40, of Atlanta, on February 9, 2016.  Both defendants made their initial appearances today before U.S. Magistrate Judge Justin S. Anand.

Members of the public are reminded that the indictment only contains charges.  The defendants are presumed innocent of the charges and it will be the government’s burden to prove each defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the FBI.  Valuable assistance has also been provided by Special Agents of the Criminal Investigation Division of the IRS.

Assistant United States Attorneys David M. Chaiken and J. Russell Phillips are prosecuting the case.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov

or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.