Monday, November 26, 2012

Michigan AG Indicts Georgia-based Firms on Racketeering Charges Thru Mortgage Fraud

Schuette indicts Georgia-based firm on racketeering charges

By Brian J. O’Connor
Detroit News Finance Editor

Detroit — The Michigan attorney general has indicted the former president of a Georgia-based document processing company on charges of racketeering in connection with the alleged forgery of documents used in thousands of Michigan home foreclosures.

Attorney General Bill Schuette announced the indictment at a downtown press conference Monday morning. Schuette said Lorraine Brown, the former president of DocX, an Alpharetta, Ga.-based loan document processor, was being charged Monday in Kent County.

On Tuesday, Brown pleaded guilty in federal U.S. District Court in Florida to conspiracy to commit mail and wire fraud. She also agreed to plead guilty to felony fraud and perjury in Missouri, with a prison sentence of between two to three years.

Schuette's office launched its investigation in April 2011 and has twice issued criminal subpoenas in the case, the last one as recently as March, according statements from the Attorney General's Office. The subpoenas were approved by the Ingham County District Court.

The Michigan investigation came after a "60 Minutes" television broadcast showed wide-ranging forgeries of the name "Linda Green" on documents prepared by DocX. Since then, DocX has closed.

In June 2011, the Attorney General's Office issued criminal investigative subpoenas to the parent company of DocX, Lender Processing Services Inc., as well as two affiliated firms, Fidelity National Financial Inc. and CT Corporation System.

In August, parent company Lender Processing Services announced a $2 million settlement with Missouri state officials over similar complaints and said it would cooperate in an ongoing criminal investigation.

Ingham County Register of Deeds Curtis Hertel Jr. has been prominent in making his concerns known about ongoing robo-signing issues in the state and forwarded his suspicions last July to the attorney general and the Federal Bureau of Investigation.

"That's good news," Hertel said Friday, when told about the Monday press conference. "I turned over a lot of data to the Attorney General's Office about a year-and-a-half ago."

Complaints about DocX targeted the practice of "robo-signing," in which legal documents required by state law in foreclosures are signed with faked signatures, illegally back-dated, or contain false information.

In such cases, several or even dozens of lawyers or employees of banks, mortgage companies and mortgage servicers sign the names of a single authorized executive, and subsequently have those forged documents notarized and submitted to court.

The same kinds of fraud were at the root of the $25 billion "robo-signing" settlement over legal foreclosures that the U.S. attorney general and 49 states, including Michigan, forced on five major banks in February.

If convicted, Brown could face up to 20 years in prison. Schuette said arrangements were being made for Brown to surrender in Michigan after being charged Monday. He added that the investigation was continuing, including scrutiny of robo-signing complaints at other firms raised by several county deed offices.

(313) 222-2145

From The Detroit News:

No comments: