In the wake of state Senator John Sampson’s indictment over the alleged embezzlement of escrowed foreclosure funds, a new rule in Kings County Supreme Court in Brooklyn requires judges to confirm that funds from foreclosure auctions are deposited with the clerk, the New York Post reported.
The reform launched two weeks ago and will soon be administered in other boroughs, Lawrence Knipel, the court’s administrative judge for civil matters, told the Post.
Sampson, also an attorney, had been appointed by Brooklyn judges to serve as a referee in several foreclosures. He pleaded not guilty to last month’s charges that he embezzled $440,000 in escrow funds from four foreclosure accounts.
Attorneys like Sampson are often assigned by civil judges to oversee the auction of a foreclosed property, pay off the mortgage and return any leftover money to the homeowner, the newspaper said. Now, the clerk will inform the judge when the winning bid exceeds the amount owed on the house. The judge will then check if the money was properly deposited in the 60 days after the auction, the Post said. [NYP] – Mark Maurer