David Saks: FLORIDA'S LENDER PROCESSING SERVICES INC. TO PAY $35 MILLION FOR FRAUD

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

FLORIDA'S LENDER PROCESSING SERVICES INC. TO PAY $35 MILLION FOR FRAUD

Florida-Based Lender Processing Services Inc. to Pay $35 Million in Agreement to Resolve Criminal Fraud Violations Following Guilty Plea from Subsidiary CEO
Agreement Also Follows Closure of Subsidiary DocX Operations

U.S. Department of Justice February 15, 2013
  • Middle District of Florida (904) 301-6300
 

WASHINGTON—Lender Processing Services Inc. (LPS), a publicly traded mortgage servicing company based in Jacksonville, Florida, has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than one million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.

The settlement, which follows a felony guilty plea from the chief executive officer of wholly owned LPS subsidiary DocX LLC, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Florida Robert E. O’Neill.

The non-prosecution agreement, which LPS entered into today with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Florida, requires the company to make the payment and meet a series of other conditions.

Lorraine Brown, the former CEO of DocX LLC, pleaded guilty on November 20, 2012, in federal court in Jacksonville to conspiracy to commit mail and wire fraud. During her guilty plea, Brown admitted to her leadership role in the scheme.

LPS has taken a number of remedial actions to address the misconduct at DocX.

Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate, and terminated Brown and others.

LPS has also demonstrated changes in its compliance, training, and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal, and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.

According to the statement of facts accompanying the agreement, before its wind-down, DocX was in the business of assisting residential mortgage servicers with creating and executing mortgage-related documents to be filed with property recorders’ offices throughout the United States.

Employees of DocX, at the direction of Brown and others, falsified signatures on the documents.

Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers.

These signing practices were used at DocX from at least March 2003 until late 2009 and were implemented to increase profits.

Also to increase profits, Brown hired temporary workers to sign as authorized signers.

These temporary employees would sign mortgage-related documents at a much lower cost and without the quality controls represented to clients.

These documents were then falsely notarized by employees at DocX, allowing the fraud scheme to remain undetected.

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country.

Many of these documents—particularly mortgage assignments, lost note affidavits, and lost assignment affidavits—were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.

In entering into the non-prosecution agreement with LPS, the Justice Department took several factors into consideration.

Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation, and effectively remediated any problems it discovered.

The government’s investigation also revealed that Brown and others at DocX took various steps to actively conceal the misconduct from detection, including from LPS senior management and auditors.

Brown, 51, of Alpharetta, Georgia, faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. She is scheduled to be sentenced on April 23, 2013, before U.S. District Judge Henry Lee Adams Jr. in Jacksonville.

This case is being handled by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Justice Department’s Criminal Division Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. The case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

source: FBI



David Saks



Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.

 

Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.

 

 

 

 

"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


 

  Real Estate Crimes

 

Click "HERE" For Today's Question

 

 

TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis

WUMR

 

Support
America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

Comment balloon 2 commentsDavid Saks • February 19 2013 02:43PM

Comments

These reports never cease to amaze me ..

HelpfulHannah

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) almost 7 years ago

They never cease, Hannah ! This is a bad case. Many suffered because of the fraud Brown carried out. The financial losses are staggering.

Posted by David Saks ((retired)) almost 7 years ago

This blog does not allow anonymous comments