INDIAN RIVER COUNTY – Two people who placed their money with Coastal Escrow Services and lost it when the company folded were among the first witnesses to testify in the trial of former Vero Beach attorney Ira Hatch.
One person who testified had placed $65,000 into Coastal Escrow Service’s care as a down payment on a business venture he planned to start in Palm Beach County. Another gave the escrow firm $5,000 as a down payment on a home in Sebastian.
Tyler Lewis, of Lake Worth, Fla., told the court Thursday afternoon that he had entered into an agreement to purchase a restaurant site with the intent of opening a business he called “Industrial Steam Cleaning of Palm Beach.”
“I was a budding entrepreneur,” Lewis said.
He reached the agreement to buy the property on May 30, 2007, for $83,000. The down payment of $65,000 represented the cash portion of the purchase price – “the bulk of my life’s savings at that time,” Lewis said.
He explained to the court that he had to put so much money into escrow because he is a Canadian citizen. In order for him to buy the property, he needed a special visa – that visa required him to put the cash portion of the purchase price into escrow.
Shortly before Lewis was set to close on the purchase, he told the court, he received a fax from Coastal Escrow Services, which informed him – and the other clients – that the business had closed and that the staff was working on a way to refund all money the company was holding for its clients.
Lewis said he never received his refund and is still out $65,000. He told the court he never gave Hatch – the owner of Coastal Escrow Services – permission to use his money for anything other than the down payment on the property.
Now-Sebastian resident Michaline Dietz fared a little better in comparison to Lewis. She and her now-late husband had entrusted $5,000 to Coastal Escrow Services as a down payment on a home when they decided to move from Massachusetts.
The real estate agency they used, Re/Max in Sebastian, had arranged for the escrow to be held with Coastal Escrow Services and asked the couple to cut a check to the company.
When they were notified that Coastal Escrow Services had been shut down and their money was not available, Dietz told the court, Re/Max absorbed the $5,000 into their closing costs.
“Re/Max made good by it,” Dietz said.
She and her husband were able to close on their new house as planned in October 2007.
Defense attorney Greg Eisenmenger asked Dietz if she had ever met or spoken with Hatch – in response to Assistant State Attorney Lev Evans’ questions about if she had given Hatch permission to use her money for anything other than the house’s down payment.
“I do not even know Mr. Hatch,” Dietz said.
She went on to say that she had no knowledge or experience with Coastal Escrow Services and only sent the company money because her real estate agent told her to do so – “Not my choice.”
The rest of Thursday’s testimony revolved around a Coastal Escrow Services employee’s reconciliation of the company’s bank accounts.
After having Amelia Lennon review the money market account’s bank statements, reconciliation reports and other files for every month from January 2004 through December 2006, Eisenmenger asked the court to strike the files from the record.
He argued that the files were incomplete and should not be allowed to stand.
Judge James Midelis denied Eisenmenger’s motion, saying that Eisenmenger had time to review the files for himself and discover the level of their completeness prior to trial.
The trial is expected to resume Friday morning.