"It's important for us to be able to reach out to the account holders," said J. Dee Dennis Jr., superintendent of the state Regulation and Licensing Department.
The receiver in the case, Albuquerque lawyer Darryl Millet, is leading a forensic audit examining each account. During the next two weeks, he will send letters to customers with instructions on how to handle their accounts.
Dennis urged New Mexico Title Escrow customers who do not receive letters by May 25 to contact Millet.
Dennis said the investigation to date does not support the conclusion aired by some customers and media outlets that the business was home to a Ponzi scheme.
"It does not look to me — and we're talking strictly about the escrow company here — that it is a Ponzi scheme," he said. "I believe that what we will see is potential mismanagement of accounts and improper accounting for those. It may get to something more significant in the nature of fraud or criminal activity."
The San Juan County District Attorney's office is participating in the investigation, Dennis said.
New Mexico Title Co. closed abruptly Jan. 30, and the escrow company followed soon after amid complaints from customers that money deposited into accounts was not properly credited, or that expected payments from escrow accounts were not made.
The businesses shared the same location, 650 W. Main St., Suite C.
Court files in Santa Fe include revelations that New Mexico Title Co. funds were used for a $132,880 executive suite at the Denver Broncos' football stadium, and that the escrow company kept $78,630 in cash in a metal file drawer at the business, rather than in a bank account as required by state regulations.
The Regulation and Licensing Department announced last week that it will host a public meeting along with other agencies in Farmington by mid-June to discuss the case. A time and location for the meeting will be announced later.
The announcement followed a meeting May 1 at the Farmington Civic Center hosted by the Public Regulation Commission, which is investigating the title company.
Dennis said there appears to have been some sharing of funds between the title and escrow company.
"The bookkeeping and accounting for the title company and the escrow company were housed on the same computer system, and the extent of the commingling of the accounts and funds has not been determined yet," he said. "We do know there was some commingling going on."
At the May 1 meeting, state insurance investigator John Gaherty said he had tracked funds that flowed improperly from the title company to the escrow company.
Dennis said state law and regulations appeared to have been violated.
"Our investigation uncovered several violations of the Escrow Company Act and regulations by New Mexico Title Escrow, including failure to maintain records and perform monthly reconciliations," he added in a prepared statement. "These are serious violations that require a thorough review and appropriate remedial actions to restore customer confidence.
Dennis added, "We understand that this has been a frustrating process for customers. However, we're working diligently to ensure that things are done correctly and legally to protect customers' interests. This means working with the courts and the legal process in order to properly serve customers."
Cynthia Richards, director of the Financial Institutions Division, said her regulators had no proper documentation to work or track customer accounts with.
"We were and are faced with the daunting and tedious task of carefully reviewing computer records and recreating every account," she said. "This is an extremely complex investigation in terms of the size of the company, the number of customers affected and the remedy of appointing a receiver to oversee business operations."