The term "escrow" is not unique to real estate. In its origins, it relates to the word "scroll" and refers to money or property that a third party is to hold in trust for another, to be turned over when a certain condition is met.
Most commonly, in modern America, such conditions concern the payment of some part of a real estate transaction. For example, homeowners may put money into an escrow account held by a mortgage company for the payment of property taxes or mortgage insurance.
In a recent St. Louis case, law enforcement authorities have charged the former office manager of a real estate title company with wrongfully taking money from an escrow account. According to the charges, the 45-year-old woman used the money not for herself, but to pay the title company's bills for several years in the aftermath of the Great Recession.
The formal charge is two counts of wire fraud.
Authorities contend the office manager did not only take money from the firm's escrow account. They allege that she also falsified financial records to conceal the absence of the money.
According to the indictment, however, an audit revealed the discrepancy in the escrow account balance. The charges further assert that the diversion of funds ultimately led to the closure of the company.
This is a rather unusual case because normally the diversion of funds by a trusted employee is associated with embezzlement or some other form of self-dealing. Behavior of that type is not alleged in the indictment
Source: St. Louis Post-Dispatch, "Manger at St. Louis title company indicted for diverting escrow money," Robert Patrick, June 27, 2013