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DFPI vs Valley Escrow Inc.

The Commissioner brings this action pursuant to the provisions of the Escrow Law, and the rules and regulations promulgated thereunder. Financial Code section 17406, subdivision (a) requires all licensees under the Escrow Law to file an annual audit report containing audited financial statements (Audit Report) within 105 days after the close of the calendar year or the licensee’s fiscal year. Valley Escrow’s fiscal year-end is December 31. Failure to file the annual audit report by the deadline subjects licensees to penalties.

In 2018, the Department discovered that Valley Escrow failed to timely file its 2017 Audit Report, which was due on April 16, 2018, in violation of Financial Code section 17406. As a result, the Commissioner and Valley Escrow entered into a Consent Order in July of 2018, wherein Valley Escrow agreed to pay a penalty for filing its 2017 Audit Report late.  

However, Valley Escrow continued to file its Audit Reports late as described below:   (1) Valley Escrow filed its 2018 Audit Report on April 24, 2019, nine days after the due date.  (2) Valley Escrow filed its 2020 Audit Report on May 10, 2021, twenty-five days after the due date.  (3) Valley Escrow filed its 2021 Audit Report on June 14, 2022, sixty days after the due date and twenty-nine days later than the allowed filing extension due date.  (4) Valley Escrow’s 2022 Audit Report was due on April 17, 2023. On May 31,2023, Valley Escrow requested an extension for 10 days; the Department denied the extension request.  (5) On May 22, 2023, the Department sent a letter to the Respondents and demanded Valley Escrow file its 2022 Audit Report within 10 days of the date of the demand. The demand letter further warned Respondents of the disciplinary actions, including, but not limited to suspending or revoking its license and assessing a penalty for its failure to timely file its Audit Reports in accordance with Financial Code sections 17408 and 17602.5.  (6) Valley Escrow filed its 2022 Audit Report on June 18, 2024, four hundred and twenty-eight days after the due date.

Valley Escrow’s 2023 Audit Report was due on April 15, 2024. However, Valley Escrow has yet to file its 2023 Audit Report, which is now six months late. The Commissioner finds that Valley Escrow violated Financial Code sections 17210 and 17406. Respondents acknowledge and agree with the Commissioner’s findings.  

Order to Discontinue Violations. Pursuant to Financial Code sections 17602 and 17604, Valley Escrow, Inc. is hereby ordered to immediately discontinue violations of the Escrow Law, set forth herein. Valley Escrow, Inc. is ordered to maintain, at all times, the required liquid assets and tangible net worth mandated by Financial Code section 17210 and timely file its annual audit reports containing audited financial statements as required by Financial Code section 17406. This order is final and effective from the Effective Date of this Consent Order, as defined in paragraph 28 (Effective Date). 

Pursuant to Financial Code section 17408, Valley Escrow, Inc., Adrian J. Orozco, and Sandra Hernandez, jointly and severally, are hereby ordered to pay an administrative penalty in the amount of $50,000.00, no later than 30 days after the Effective Date of this Consent Order.