One of the title companies that handled ABC Capital’s disastrous sale of hundreds of homes in distressed Baltimore neighborhoods to foreign buyers has been stripped of its license.

The move by the state’s insurance regulators against Masters Title is the latest fallout since The Baltimore Banner exposed how ABC Capital marketed more than 1,000 homes to buyers in foreign countries and, in many cases, failed to deliver on promised renovations and tenants, compounding problems in Baltimore’s already-distressed neighborhoods.

It has since emerged that in other cases, transactions that were paid for didn’t take place at all. Victims have called the operation a Ponzi scheme that stretched across the world.

Separately, another title company, Castle Title, is nearing trials in which it says it was a victim of a fraud orchestrated by ABC Capital that included forging signatures and falsifying documents.

“The impact of ABC’s scheme on Baltimore’s real estate community was cataclysmic, amounting to an extinction event for several involved settlement companies,” said attorney Thomas Valkenet, who continues to pursue relief for investors who say they were ripped off.

The Philadelphia-based ABC Capital filed for bankruptcy in 2022, enabling it to avoid a slew of pending lawsuits in Maryland and Pennsylvania. Pennsylvania’s Office of Attorney General last spring said the company and its owner, Jay Walsh, engaged in unfair or deceptive trade practices but reached a deal enabling him to avoid paying fines or admitting wrongdoing, and allowing him to make real estate deals in the state as long as he didn’t operate as a property manager for the next 25 years.

In Baltimore, Walsh was convicted only of acting as a contractor without a license and ordered to pay $20,500 restitution to one victim. Apparently living in Aruba, he continues to dispense real estate advice over the internet, according to his Instagram social media page.

Daniel P. Murphy, the owner of Masters Title, told investigators with the Maryland Insurance Administration that he did not conduct accounting or auditing of funds that passed through his company related to ABC Capital, according to the consent order. He also comingled funds and committed other errors which led to hundreds of unrecorded deeds and missed lien searches.

“Respondents failed in this case by, among other things, not conducting required due diligence of individual transactions and by commingling [sic] escrow monies,” regulators wrote in a late January order.

In a statement to the Baltimore Banner, Murphy said he “personally had zero knowledge about ABC files and only came in to do damage control and right the ship.”

“It’s an upsetting affair what ABC did and I just want to move on,” Murphy said.

The Maryland Insurance Administration revoked the title insurance producer license of both the company and Murphy, and issued an administrative penalty of $3,500. They also directed Masters to pay out all outstanding escrow funds to property investors that Murphy had shifted to an outside company as problems with ABC Capital became apparent.

Masters shut down in April 2024, after its title insurer pulled out, citing accounting problems.

Masters wasn’t the only title company to shut down in the wake of ABC Capital’s collapse. The state insurance department investigation of Lutherville-based Castle Title remains ongoing after two years, a spokesman said. Castle went out of business in 2023.

Castle Title has since asked a court to help it pay out funds it owes ABC Capital clients, and is also set to be in court as a defendant in a string of civil trials scheduled to start in June. Investors have alleged Castle collected more than $1 million from them for transactions that were never completed.

Castle, which was owned by David B. Kramer, says in court papers that it did business with ABC Capital for more than two years “without any red flags, title claims or other issues.”

But the ABC Capital clients trying to recoup funds say Castle is trying to shift blame unfairly from the company.

“The failures were entirely Castle Title’s, as fiduciary and owner of the trust accounts,” they wrote in a recent court filing. “Castle Title was a part of the frauds alleged, acting to receive and direct funds as directed by business partners it now considers to be ‘fraudsters.’”

Castle’s attorneys allege in court filings that in the spring of 2023 — several months after The Banner first began reporting on mounting claims against ABC Capital — they belatedly discovered that ABC had falsified settlement statements, forged Castle Title’s employees’ signatures on documents, drafted false title insurance documents and engaged in other fraud.

After discovering what they say was fraud, Castle said in court papers that the title company immediately ceased doing business with ABC Capital, alerted its underwriters and froze the portion of its escrow account related to ABC clients.

Castle said in court filings that it has $678,252 that the court should now distribute among ABC clients who can show they were affected by the alleged fraud.