A Tennessee attorney will spend almost three years in prison with two years of supervised release tacked on at the end for embezzling more than $2 million from the real estate closing company that bore his name.
According to the U.S. Attorney’s Office for the Middle District of Tennessee, Garry Forsythe pleaded guilty in December to one count of wire fraud late last year for his role in a scheme that involved the alleged theft of $2.25 million in escrow funds from the title company he owned, Forsythe Title and Escrow.
Evidence shown in court during Forsythe’s sentencing hearing revealed that Forsythe Title and Escrow’s escrow accounts developed shortages of more than $2.2 million because Forsythe made inflated or unsupported transfers of funds from the escrow accounts to the company’s operating accounts.
Forsythe claimed that the escrow shortages were inadvertently caused by the failure to deposit checks or by bank errors, but the court disagreed.
According to the U.S. Attorney’s Office, evidence demonstrated that, in one instance, funds were transferred from an escrow account at Forsythe Title & Escrow and used for the down payment on a boat purchased by Forsythe.
Evidence also showed that the escrow shortages resulted in bounced checks, delays in scheduled real estate closings, and, in some cases, instances where borrowers were left with two mortgages because Forsythe Title & Escrow didn’t pay the relevant financial institutions, instead keeping the money.
In addition to his sentence, Forsythe is required to pay $2,249,294.80 in restitution and to forfeit the proceeds of his crime.