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Department of Corporations Issues Desist and Refrain Order Against Unlicensed Escrow Company

Mortgage Daily

Published On: March 19, 2002

Department of Corporations Issues Desist and Refrain Order Against Unlicensed Escrow CompanyOnline Consumers Warned to Steer Clear of Cyberscam

SACRAMENTO, CA (March 19, 2002) — The Davis Administration announced that the Department of Corporations issued a Desist and Refrain Order against Mark D. Zarubi and X-Change Reciprocal Services, LLC, ordering the company and its president to stop receiving escrows for deposit and/or delivery for lack of a California escrow license.

“Unlicensed operators have posted on a Web site with a phony Department of Corporations license number and a link to our Web site to fool consumers into thinking that they are on the up-and-up,” said California Corporations Commissioner Demetrios A. Boutris. “This case demonstrates that consumers must be vigilant by doing their homework before handing a stranger their money in the financial services marketplace.”

Members of the public responding to classified ads found on Web sites such as Yahoo.com, Infospace.com and Classifieds2000.com for products including computers and computer equipment have received e-mails from the purported sellers suggesting that they use the escrow services of a company located at Secure-Escrow.com in connection with the transaction.

The Web site Secure-Escrow.com states that the company is located in Montgomery, Alabama and that it provides escrow services through a subsidiary called Hardfort Escrow, Inc. According to the Web site, Hardfort Escrow, Inc. “is fully licensed and accredited as an escrow company” and possesses license number 8237136 issued by the California Department of Corporations. In fact, Hardfort Escrow, Inc. is not a company licensed by the California Department of Corporations, and the Department of Corporations has no outstanding escrow license numbered 8237136.

People who have registered with Secure-Escrow.com have been instructed to wire funds for their purchases to a bank account in Reno, Nevada. The prospective purchasers have been told that the account is held in the name of X-Change Reciprocal Services, LLC. Although prospective purchasers wired funds to the account as instructed, the products were never shipped to them.


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The Department of Corporations is California’s Investment and Financing Authority, reporting to the Business, Transportation and Housing Agency and the Governor. The Department is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, see the Department’s Web site at www.corp.ca.gov.

CONTACT:
California Department of Corporations Andre Pineda
916.327.6696


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