A leading title insurer has taken Citibank to court, seeking the return of more than $525,000 after an escrow fraud led to a full policy payout.
Old Republic National Title Insurance Company filed a complaint in the United States District Court for the Northern District of California on October 15, 2025, naming Citibank, N.A. as defendant. The complaint alleges that an unknown bad actor impersonated the true owners of vacant land in King County, Washington, and purported to sell the property to an entity called KKM23, LLC. Old Republic Title, Ltd., a Delaware corporation, acted as the escrow holder for the transaction.
According to the complaint, the buyer deposited the purchase funds with Old Republic Title, Ltd. On May 8, 2025, the escrow holder wired $525,653.06 from its account at US Bank National Association to an account at Citibank, believing it belonged to one of the purported sellers, Jerome Novak. The funds, referred to in the complaint as “the Funds,” were intended to complete the property transfer.
By July 2025, Old Republic Title, Ltd. began to suspect that the transaction was fraudulent. The company alleges that a bad actor had impersonated the real owners of the property, and the entire sale was a sham designed to divert the buyer’s funds. On or about July 14, 2025, Old Republic Title, Ltd. attempted to recall the wire transfer due to the suspected fraud.
The complaint states that, pursuant to its obligations under the title insurance policy it had issued to the buyer, Old Republic National Title Insurance Company paid the buyer the full policy limits - $559,984.00. Old Republic contends that, having paid out under the policy, it is equitably and contractually subrogated to the buyer’s rights to the funds that were wired to Citibank.
Old Republic demanded that Citibank return the funds, but the bank declined. The insurer alleges that some or all of the funds remain in the Citibank account and that Citibank has no legal right to retain them. The complaint seeks a judicial declaration that Old Republic rightfully owns the funds, the imposition of a constructive trust with Citibank as trustee, and an equitable lien in favor of Old Republic.
The legal action lays out three causes of action: declaratory relief, the imposition of a constructive trust, and the imposition of an equitable lien. Old Republic’s position is that the funds rightfully belonged to the buyer, and, after the insurer paid out the policy limits, to Old Republic by subrogation. The complaint states that Old Republic is seeking to recover the funds following the fraudulent transaction.
No specific insurance policy clauses are quoted in the complaint, but the case is based on Old Republic’s obligations under the title insurance policy and its rights following a payout due to fraud.
All allegations remain unproven, and the outcome of the case is yet to be determined. The case highlights the risks of escrow fraud and the role of title insurance in protecting parties to real estate transactions, as well as the legal steps insurers may take to recover losses.
