Insurance Division says owner operated without license

An owner of now-defunct Alta Vista Title Company of Denver was hit Friday with a cease and desist order by the Colorado Division of Insurance for allegedly operating without a license to sell title insurance.

The Division of Insurance served an ex parte emergency order to cease and desist "the unlawful transaction of insurance" on Arthur M. Vasquez, a majority owner of Alta Vista, his attorney and his company on Friday.

The title insurance company, which shut down in April, is currently under investigation by the insurance department. Vasquez is under investigation by the Division for having allegedly withdrawn about $900,000 from escrow accounts, as well as other executives, according to media reports.

Texas-based Stewart Title Guaranty Co. filed a complaint in Denver District Court in April saying Vasquez had "improperly withdrawn" about $900,000 from escrow accounts. A court clerk said Stewart also filed a motion for a temporary restraining order and a motion for a preliminary injunction.

Alta Vista is what is known as an "independent agent" of Stewart, which means the company can write title insurance for a number of insurers and is not confined to any one insurer. The now-shuttered company's duties included soliciting applications for title insurance for Stewart and collecting premiums.

"We are cooperating with (the Department's) investigation," said Bill Ritter, Vasquez's lawyer, who last week registered his intent to run for governor of Colorado in 2006.

"We will be filing an answer to Stewart's complaint by tomorrow," Ritter said Monday. The attorney is representing Vasquez as an individual, he said. Ritter said the company has a different attorney.

"We are going to answer the complaint and that's about all I can say," Ritter said.

The commission is also seeking information on Michael Healey, a co-owner of Alta Vista, and Laura Martinez, a former escrow manager at Alta Vista, the Rocky Mountain Times reported Friday. Healey told the Times he has done nothing wrong and the insurance commission investigation will clear his name.

Vasquez did not have a license to sell title insurance, according to the order, which was issued Thursday and served on Vasquez, his attorney and Alta Vista Title Friday.

Vasquez faces up to a $25,000 a day fine if he violates the order.

"By his own admission (Vasquez) misappropriated escrow account funds, which include premiums owed to Stewart Title Guaranty Co. and Attorneys' Title Guaranty Fund Inc.," according to the order.

The order noted that while at Alta Vista, Vasquez "solicited, sold and negotiated title insurance in Colorado by personally conducting sales seminars with local mortgage brokers, real estate agents and closing agents."

The cease-and-desist order said Vasquez must stop transacting insurance business in Colorado until duly licensed. The title company owner also must produce outstanding and current insurance contracts currently in force and tell the Commissioner the amount of insurance coverage and gross amount of premiums paid or to be paid for each contract within 30 days, the order said.

Colorado has been a hotbed of controversy for the title insurance industry. The state in February was first to launch an investigation of national title insurers for their alleged participation in kickback schemes with real estate companies, home builders and developers.

Several states, including California, Florida and Arizona, have launched similar investigations, alleging that title companies kicked back a portion of profits in exchange for volumes of business, a violation of state laws and the federal Real Estate Settlement Procedures Act, known as RESPA.

The activities Alta Vista Title is alleged to have engaged in are different from the alleged schemes in these investigations.