Foreclosure Fraud: First Criminal Charges Filed In Nevada Over Robo-Signing

PHOTO CREDIT:
Nevada Attorney General's Office

Original Source Article by ARTHUR DELANEY and LOREN BERLIN, HUFFPOST BUSINESS

Two midlevel staffers at Lender Processing Services, a mortgage document company, were indicted on a amazing 606 counts of felony and gross misdemeanor for directing employees to forge signatures and falsely notarize documents used to illegally foreclose on Nevada homeowners.

This is the first criminal indictment since last year's discovery of the nationwide "robo-signing" scandal, in which mortgage servicing companies and banks were processing foreclosures (en masse and at lightning speed) by signing documents they neglected to review, and by falsifying information.

***

"The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder's Office between 2005 and 2008," said Nevada's chief deputy attorney general, John Kelleher, in a statement.

The indictment against the two employees, Gary Trafford and Gerri Sheppard, describes them as LPS title officers and California residents. Neither has been arrested, but the court has set bail at $500,000 each.

Prentiss Cox, a law professor at the University of Minnesota and a former assistant state attorney general, said it was great to pursue the robo-signing case. But, he added, "When criminal prosecutions are done for robo-signing, I would hope the target of those prosecutions would be the people who designed the system and profited from it, not just the low-level people doing what they were told."

A spokeswoman for the Nevada Attorney General declined to confirm or deny whether the attorney general's office is pursuing an investigation into higher-level LPS employees. As for the company's clients, Kelleher told American Banker, "We simply don't know if the major banks were aware of what these individuals were doing." Kelleher added that the state would consider future actions if it were to discover that banks had sanctioned robo-signing.

The Nevada indictments come as a coalition of state law enforcement officials and the Obama administration are pursuing a settlement with big banks over their role in robo-signing and other alleged mistreatment of struggling homeowners.

Read Full Article

TOM’S COMMENTARY:

Let's remember where this started out:

A Florida Lawyer by the name of Lynn Szymoniak, who happens to be an expert on white collar crime, fell behind on her mortgage payments while caring for her dying mother.

When the bank foreclosed, she read the papers, and started noticing strange things, which, as a fraud expert, meant something to her.

Over the next year or so, she gathered documents from all over the country, showing the "fruits" of the robosigning practice.  Other Florida lawyers engaged in foreclosure defense carried it forward by taking the depositions of many employees of law firms and default service companies that engaged in these practices.

It took more than a year for the private lawyers to get the government's attention.  Finally, former Florida Attorney General Bill McCollom took an interest, and a pair of female assistant attorneys general dug in on it, and aggressively investigated.

Then the election of 2010 happened.  Pam Bondi became Florida's next attorney general, the two assistants who were focused on this investigation were fired, and very little has been done in Florida on this issue since.

As a result, Florida went from leading the nation in investigating these scum-bags, to... well, let's just say that we're a really bank-friendly state again.  Thanks, Pam.

GO NEVADA!!!

But who'se going to investigate OUR scum-bags?

I'm waiting.

Return to Blog

.