Nathan E. Hardwick IV
Nathan E. Hardwick IV ()

Related Article: Hardwick Denies Embezzling from Firm

Residential real estate firm Morris Hardwick Schneider alleges that founder Nathan Hardwick IV embezzled more than $30 million from the firm and its affiliated title company, LandCastle Title.

In a suit filed Monday in Fulton County Superior Court, the firm claims Hardwick used the money to pay for casino expenses, private jet rides, a luxury Buckhead condo and real estate investments.

The two firms allege in the complaint that Hardwick raided the trust and escrow accounts that the firms maintain for residential mortgage closings and then created false bank statements and altered accounting records to hide the deficits.

Hardwick was listed as MHS’s managing partner and as the board chairman and CEO for LandCastle Title in a biography that has been deleted from MHS’s website.

A nanny who answered the phone at Hardwick’s residence at the St. Regis in Buckhead said he was not at home.

LandCastle’s lawyer, W. Reese Willis III of Fidelity National Law Group, declined to comment on active litigation. “The complaint speaks for itself,” he said.

Art Morris, another founding partner of MHS, did not respond to requests for comment, nor did MHS’s lawyer, Jeffrey Schneider of Weissman, Nowack, Curry & Wilco.

Fidelity National Title Group bought a 70 percent interest in LandCastle Title, one of its agents, after the escrow account losses were discovered, according to a letter Fidelity National posted Monday to MHS and LandCastles’ joint website.

A “significant shortage” in the accounts of MHS and LandCastle prompted the acquisition and Fidelity National is funding the shortages in return for the ownership interest in LandCastle, according to the letter. Fidelity National Title Group is owned by Fidelity National Financial.

Hardwick has resigned from MHS and Mark Wittstadt is now the managing partner, according to the letter, which was signed by Wittstadt and David Baum, the Southeast regional manager for Fidelity National Title Group who is now the president of LandCastle Title.

According to the suit, Hardwick spent $4 million from MHS’s trust accounts in wire transfers to casinos, $1 million to pay private jet companies, and $645,000 to cover losses from failed property investments.

He diverted $6.3 million from MHS’s trust accounts to a personal holding company called Divot, according to the suit, which names Divot as a co-defendant. According to Hardwick’s firm bio, he is an “avid golfer.”

Hardwick partially financed the February 2013 purchase of a $3 million unit at the St. Regis in Buckhead with funds from MHS and LandCastle, according to the suit, and siphoned off another $390,000 in regular payments to himself from MHS’s trust accounts, after draining the operating accounts.

The suit alleges that Hardwick has been embezzling money for at least 18 months, saying the $390,000 in personal payouts from the MHS trust accounts occurred between January 2012 and July 2014.

‘The far-reaching impact on lenders, realtors, law firms and consumers would have been a catastrophe had our parent company, Fidelity National Financial Inc. not stepped in with the capital and resources available to us and a plan to allow them to move forward,” said Fidelity National Title’s state manager Jim Petropoulos in an email to members of the Mortgage Bankers Association of Georgia.

MHS and LandCastle Title are headquartered in Atlanta. They have more than 50 offices in Georgia, Florida, Alabama, Mississippi, South Carolina, Tennessee, Virginia, West Virginia, Delaware, Maryland and Ohio.