The Titus Touch: FBI investigating popular lawyer and ‘asset protection’ guru Posted to: News Virginia Beach

By Marc Davis

The Virginian-Pilot

© February 3, 2008

VIRGINIA BEACH

Josephine Bodmer is 84 years old and broke. A lawyer took all of her savings.

She remembers the man vividly. His name is Troy A. Titus – a handsome, charismatic, young man. Good Christian family. His father was dean of the Regent University School of Law.

He seemed smart, trustworthy. Bodmer gave him $220,000 to put into a trust fund so she could live off the $1,500-a-month annuity.

For a while, the checks arrived every month, then they started arriving late. Finally, they stopped altogether.

She never got her money back.

Today, Bodmer lives in an assisted living apartment and depends on her children for day-to-day expenses. She is deeply embarrassed.

“He took every cent I had,” she said. “He destroyed me.”

And she is not alone.

A little over two years ago, Titus surrendered his law license under pressure, facing 15 complaints from former clients, investors and banks. The bar then permanently revoked his license. Since then, he has been sued 12 times by people alleging fraud, theft and deception.

Tallying up the court claims, clients of Titus say they lost somewhere between $2 million and $3 million. Other clients and investors interviewed said they gave Titus money and never sued to get it back because they didn’t think they could recover their money.

The Virginia State Bar revoked Titus’ license for “ethical misconduct” – bouncing checks on his client trust accounts. And not just a few checks: At one point in 2004, Titus’ real estate trust account was $2.5 million in the hole, according to the bar.

All of that money came from clients’ real estate closings. Titus was supposed to hold the money just long enough to pay off the old mortgages and the sellers.

Some clients later sued Titus to recover their money, and some have won judgments against him. With rare exception, Titus usually does not file answers to these lawsuits and does not show up in court to defend himself.

As a result, Titus has lost several cases by default.

Last year, for example, a Virginia Beach judge awarded one former client $500,000 in compensatory damages and $100,000 in punitive damages arising from a complex real estate swindle. In that case, the judge specifically ruled that Titus had committed fraud against the client.

The FBI is investigating Titus. He has not been charged with any crimes, and the FBI will not comment on the investigation, but many former clients and lawyers representing them have been visited by FBI agents, one as recently as December.

Titus did not return repeated calls to his work and home. When a reporter did reach him, Titus promised to call back, but he never did.

Frustration

Today, Titus works far from the legal arena. He is a sales manager at a Norfolk car dealership.

He say she has no money. Recently, in a sworn deposition, he said he and his wife and children are living with his in-laws in Virginia Beach.

As a result, former clients and investors who lost money to Titus are finding it’s easy to win court cases against him but extremely difficult to collect their judgments.

For example, a title insurance company won a $200,000 judgment against Titus in 2006 and has spent the past two years trying to collect it. The company filed more than a dozen garnishments against Titus’ wages and corporate holdings and tried to uncover hidden assets. It even forced the auction of Titus’ household belongings in 2006, including his surfboard, golf clubs and CD collection.

Even so, the title insurance company has recovered $130,000 – roughly two-thirds of the original judgment.

At that, it was lucky. Other Titus victims have received nothing.

Bodmer, for example, won a $300,000 court judgment against Titus last year – the remaining balance of $201,000 plus interest. The judge ruled there was “clear and convincing evidence” that Titus had “breached his fiduciary duties” to Bodmer.

Still, she hasn’t recovered a penny from Titus. “It’s just such a lost cause,” said her lawyer, John S. Burton.

The State Bar has paid partial compensation to three of Titus’ former clients, with two more claims pending. The maximum possible payment is $50,000. It comes from the bar’s Clients’ Protection Fund, which pays victims of lawyers who cannot collect from other sources, such as legal malpractice insurance.

In one case in which the bar paid $50,000 to a former Titus client, the bar specifically noted it was for embezzlement.

Most frustrating to former clients is Titus’ reputation as a self-styled “asset protection” guru.

For several years before he surrendered his law license, Titus traveled the country giving lectures and selling DVDs, telling people how to shelter money from the taxman and courts. In one taped lecture, Titus told his audience, hypothetically, “I want to have my cake and eat it, too. I want to keep all of my assets but not have to lose them in the event that a judgment does come against me.”

Bodmer still doesn’t understand how such a nice man could have taken her savings.

“If you met him,” she said, “you’d be impressed. He had so much charisma, and he was so charming. I loved him.”

A charmer

In a videotaped lecture, Titus exudes confidence. He is dressed in a dark business suit and appears younger than his 41 years. He talks smoothly, reassuringly, without hesitations.

Half a dozen former clients and investors interviewed for this story used the same word to describe him: charming.

Lonnie Scruggs, a 78-year-old real estate investor from Chesapeake, met Titus through a local investment club. Titus did dozens of closings for club members and was highly respected, Scruggs said.

That’s why Scruggs trusted Titus with $500,000 in 2005. Scruggs still has the signed note in which Titus promised to return the money anytime Scruggs wanted it.

A year later, Scruggs demanded the money, but Titus didn’t return it.

“Everyone loved Troy,” Scruggs said. “He was a gifted person. If you didn’t know him and you spent a couple of hours with him, you’d be ready to give him a check. At one point, I couldn’t have asked for a better friend.”

Jason Umidi, a 40-year-old real estate investor from Norfolk, grew up with Titus. He surfed with Titus and attended Greenbrier Christian Academy in Chesapeake with Titus’ younger brother.

There was a strong family connection: Umidi’s father is a theology professor at Regent. Titus’ father was dean of Regent’s law school.

Umidi said he came to Titus with a simple real estate deal in 2005. He said the deal went sour, and it eventually cost him about $30,000 in unnecessary costs. Yet, going into the deal, Umidi said he had no doubts about trusting Titus.

“He’s smooth as silk,” he said. “You automatically assume it’s a family of faith and you can trust him.”

Another friend, Richard J. Conrod Sr., is Titus’ former law partner.

Like Titus, Conrod earned his law degree from Regent. Early in his career, Conrod said, Titus gave him many cases and advised him on how to set up a law practice.

Later, Conrod bought Titus’ law firm and kept Titus as a $100,000-a-year employee. That was one year before Titus surrendered his law license.

Five lawsuits against Titus in Virginia Beach Circuit Court name Conrod as a co-defendant.

Conrod has consistently said he knew nothing about Titus’ misdeeds, and there has never been a court judgment against him. In fact, Conrod said, he spent more than $600,000 of his own money cleaning up hundreds of Titus’ real estate closings and estate cases.

He said he worked seven days a week for a year and took no vacations except Christmas, tying up loose ends.

“I didn’t have a clue what was happening with Troy until after the fact,” Conrod said. “I trusted Troy implicitly. He’d been nothing but good to me.”

He said he think s Titus kept poor records and got in over his head. “I have a real hard time believing he set out to steal money from people,” Conrod said.

The State Bar

At a minimum, Titus was sloppy.

It started in 2003. That year, the Virginia State Bar slapped Titus with a $5,000 penalty and said he had closed 1,000 to 1,300 real estate transactions without registering as a settlement agent.

Then it got much worse.

On Sept. 28, 2005, the bar issued a 13-page report on Titus’ “ethical misconduct.” Titus signed the report and admitted that everything in it was true.

The report focused on Titus’ lousy bookkeeping. It said he received at least 15 overdraft notices from local banks between 2002 and 2005. Many of the bounced checks were large. One was for $149,000. Another was for $172,000. Another was for $397,000.

Worse, every time Titus and the bar tried to reconcile his accounts, they failed.

For example, Titus told the bar he had hired an accountant in 2003 to reorganize his firm’s accounting system. It didn’t work. The accountant said it was impossible “because of the enormity and complexity of the problem,” the report said.

Again, the accountant tried to clean up the mess. Again, he failed. At one point in 2004, the accountant found Titus had a bank balance of $2.1 million and outstanding checks totaling $4.7 million – a deficit of $2.56 million.

After that, Titus never gave the accountant any more information and “continued to engage in ethical misconduct,” the report said.

Finally, in 2005, Titus’ lawyer told the bar his client had a “massive bookkeeping problem.” He said Titus had hired a comptroller but she never completely fixed Titus’ books.

Titus surrendered his law license rather than fight the charges.

Then came a flood of lawsuits.

The lawsuits

The bar investigation raised many questions but provided few answers.

Why were Titus’ books a mess? Was it just sloppiness? Did he take the money himself? In 2006 and 2007, lawsuits made new allegations and answered some of the old questions.

Some of the claims were relatively simple.

For example, a Richmond woman named Jean S. Jacques sued Titus in August 2007. The lawsuit accused Titus of taking $65,000 from Jacques’ trust account “for his own benefit, including making bad real estate investments.” Jacques is an elderly woman in a nursing home. The money came from her mother’s inheritance.

The case is pending. Titus has never filed a reply.

Other cases were more complex.

One involved a Virginia Beach widow named Doris Addenbrook. She owned a house on the North End. Titus was her lawyer.

According to the lawsuit filed in Virginia Beach Circuit Court, Titus persuad ed her in 2004 to convey the house to a trust controlled by Titus. One year later, Titus conveyed the house to his law partner, Kristina Cardwell, in exchange for $560,000, the lawsuit said. To finance the sale, Cardwell took out a $499,999 mortgage, according to the suit.

Addenbrook received none of the money. The claim against Titus, filed in October 2006, accused Titus and Cardwell of taking the money for their own personal use.

At first, Titus contested the lawsuit. Later, his lawyer dropped out and Titus did not file any more papers or appear in court.

As a result, the court in May 2007 awarded Addenbrook $500,000 in compensatory damages and $100,000 in punitive damages. The judge ruled that Titus had committed fraud. There was no judgment against Cardwell. She declined to be interviewed for this story.

Another lawsuit involved a Beach couple named Glenn and Shirley Sawyer. The suit, filed in Circuit Court in March 2007, accused Titus, Cardwell and the law firm’s office manager of conducting a “joint scheme” to defraud the Sawyers.

According to the lawsuit, Titus persuad ed the Sawyers to invest $300,000 in two Virginia Beach properties that he did not own in exchange for a series of fraudulent deeds.

Meanwhile, Titus, Cardwell and the office manager used the Sawyers’ $300,000 “for their own personal benefit and gain, including their own personal investments and living expenses,” the lawsuit says.

The case is scheduled for trial in May. Titus has not filed a reply. Cardwell and the office manager have denied the accusations.

Hotel deal

In South Carolina, a hotel deal landed Titus in federal court.

It began when a California couple, Steve and Robin Witmer, met Titus in 2003 on a cruise. The Witmers were impressed. They hired him to do some estate planning work.

“I looked him up,” Steve Witmer said. “He and his dad had impeccable credentials.”

The Witmers gave Titus confidential financial information. Papers flew back and forth. The Witmers said they signed whatever Titus gave them.

Then last year, out of the blue, the couple was served with a lawsuit from South Carolina.

The lawsuit by Days Inns Worldwide Inc. said the Witmers guaranteed a deal with a hotel in Manning, S.C., and the contract had been breached, so they are liable for penalties.

Trouble is, the Witmers say they’ve never heard of the hotel. They say they’ve never been to South Carolina and they never signed any guarantee for any hotel. “We had nothing to do with any part of that deal,” Steve Witmer said.

The lawsuit mentions penalties of $76,000. The Witmers say they could be on the hook for $200,000.

They blame Titus.

In court papers, the Witmers say Titus used their names, without permission, on a guarantee for the hotel. They suggested that Days Inn sue Titus, not them. “Mr. Titus is the person who defrauded them, apparently using our name and information he had gathered through our estate planning process,” the Witmers wrote in a letter to the judge filed Jan. 11.

Steve Witmer is 54 and partially paralyzed. Robin is 46 and a stay-at-home caregiver for Steve and their four children. They say they are broke and couldn’t possibly have guaranteed a hotel deal.

To defend themselves, the Witmers said they spent $20,000 on a lawyer they later fired.

“We don’t have the money now to retain another attorney,” they wrote to the judge. “They want a $20,000 retainer and $10,000-a-month fee, plus expenses. This is more than we make in a year, and quite simply impossible.

“To make the decision to represent ourselves is ignorant and scary,” they wrote. “We know nothing about legal maneuvering and will certainly suffer at the hands of an experienced legal firm.”

The Witmers filed a counterclaim against Titus in May, saying he acted without their authority. Titus has not filed an answer.

The case is pending.

Payback?

In September, Titus gave a sworn deposition in the Sawyer case.

He was grilled by the Sawyers’ lawyer, Jason C. Roper. Over and over, Titus sai d he did not know important details of his own business – whether he owned certain properties and what had happened to lawsuits against him.

Finally, Roper asked the key question: Will the Sawyers ever get their money back?

“Yes,” Titus replied.

“How?”

“I owe them money. I’ll pay it back.”

“You are living with your in-laws and work in a car company. How are you going to pay them back $300,000?… Just tell me. Since you don’t have a lawyer here to object, please, tell me how you’re going to pay them back.”

“I owe them money,” Titus repeated. “I’ll pay it back.”