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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA - page 8 / 38

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D. The Scheme to Defraud.

The Amended Complaint describes a scheme to defraud that begins when title insurance is

applied for and ends when funds are disbursed to the title insurance company at settlement. The

Amended Complaint alleges that the relationship between Commonwealth Land and each title agent

is governed by an agency agreement. (Id. at ¶60.) The agreement states the conditions under which

the title agent is authorized to issue title insurance on behalf of Commonwealth Land. (Id.) Title

agents are authorized to act as settlement agents at a closing, to conduct closings of refinance

transactions on behalf of Defendant, to prepare relevant documents on behalf of Defendant, and to

collect the premium for the benefit of Defendant. (Id. at ¶104.) As noted, this case charges that

Defendant and its agents engaged in a fraudulent scheme by deliberately misrepresenting the correct

amount of money due and owing for title insurance, misappropriating the overcharges, and failing

to disclose to purchasers of title insurance that they were entitled to discounts if the property was

refinanced and title insurance was purchased within ten years. (Id. at ¶1.)

Based upon the facts underlying the scheme, Plaintiffs assert five claims against

Commonwealth Land. Count One of the Amended Complaint alleges a RICO violation with mail

and wire fraud as the predicate offenses. Count Two alleges deceptive and fraudulent conduct under

the UTPCPL. Plaintiffs assert a common law fraudulent misrepresentation claim in Count Three.

In Count Four, Plaintiffs allege, in the alternative, that Commonwealth Land negligently failed to

apply the appropriate title insurance rate and negligently failed to adequately supervise the title

agents with whom Defendant contracted. Finally, Count Five claims unjust enrichment on the part

of Defendant.

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