Disbarred lawyer Titus indicted on federal fraud charges

NORFOLK

The FBI on Tuesday arrested disbarred lawyer Troy A. Titus on a federal indictment, charging him with defrauding at least $1.5 million from former clients, including onetime R&B star Teddy Riley.

Agents arrested Titus, 42, at his Chesapeake home about 7 a.m. following a lengthy investigation into his real estate dealings. Titus made a brief appearance that afternoon in U.S. District Court, where the 10-count indictment was unsealed. A federal magistrate judge set bond at $5,000.

Titus' former business partner, Kristina M. Cardwell, a Virginia Beach attorney, also was charged in the indictment with two counts. She had not been arrested as of Tuesday afternoon.

The indictment says Titus solicited funds from clients for real estate projects by making false representations and promises as to where the money would be invested.

In addition, according to the indictment, Titus used "funds obtained from one set of investors or other sources to make 'lulling' payments to other investors" in order to create a false impression that funds were invested properly and yielding profits.

Titus, who started out as a real estate attorney, has long been under public scrutiny for his business transgressions.

The Virginian-Pilot has reported on his legal issues for years, beginning with disciplinary actions taken against him by the Virginia State Bar starting in 2003. He was ultimately disbarred in 2005 for siphoning funds from clients' escrow accounts, according to the bar.

Following his disbarment, Titus focused on real estate investing, raising millions of dollars with promises of 15 percent to 25 percent annual returns, according to the indictment.

Earlier this year, The Pilot reported that Titus faced at least a dozen lawsuits from former clients who claim he bilked them out of a total of between $2 million and $3 million.

This summer, Titus was forced into bankruptcy by Wachovia Bank and other creditors, including some of those named as victims in the indictment, seeking payment of $2.7 million.

In a bankruptcy filing two months ago, Titus reported working in marketing and sales and earning $4,000 a month with monthly debts of $6,600. But in court Tuesday, he told Magistrate Judge James E. Bradberry that he earned $8,000 a month and owned a pickup and an SUV.

Neither vehicle was reported as an asset in Titus' bankruptcy filing, but he did list $1,650 in other personal property, including computers, two coffee makers and a toaster.

While the indictment lists cash losses of about $1.5 million, it says the actual losses could be millions more when foreclosed-upon homes and properties are factored in. According to the indictment, Titus had claimed to be making real estate investments on a number of properties, but he often never filed deeds of trust or he filed deeds of trust on properties that already had liens on them worth more than the properties' assessed values.

That's what the indictment says happened to Teddy Riley, the onetime producer of Michael Jackson, and a hip-hop pioneer in his own right.

Riley came to Titus in 2005 while deep in debt and looking to stop foreclosure on his Virginia Beach home. At the time, Riley also was a principle in Future Records, or New Jack Swing Future Records, a recording studio on Virginia Beach Boulevard. (The business, since closed, burned down in June.)

But both properties had liens on them worth more than their assessed value. Even so, Titus and Cardwell obtained loans and lines of credit using the two properties as collateral, the indictment says.

Titus filed papers stating that Cardwell was either president or manager of Riley's recording company when she was neither, the indictment says. Riley knew none of what was going on, the papers say.

Titus also is accused of preying on a widow.

Doris Addenbrook and her husband, Robert, had been longtime Titus clients.

When Robert Addenbrook died in 2001, "Titus began dining with Doris, taking her to church and praying with her, activities he had never previously engaged with Doris," the indictment says.

"He told Doris that he wanted to ensure that she would have no further worries," the papers say.

First, according to the indictment, he persuaded Addenbrook to sign over to him her interest in an investment property in Virginia Beach's North End. Not only did she end up losing her interest in the property, she had to pay her husband's ex-wife $541 in monthly support, the indictment says.

Titus then promised to make good on his original promise to Addenbrook. He borrowed money from another investor, telling Addenbrook he would buy the property and pay her $4,000 in income, according to the indictment. But he ended up defaulting to both her and the investor, the indictment says, and later sold the property to Cardwell for $560,000.

Addenbrook eventually obtained a $600,000 judgment against Titus after filing suit in Virginia Beach Circuit Court. Titus defaulted on the judgment.

Tim McGlone, (757) 446-2343, tim.mcglone@pilotonline.com