Foreclosure Fraud, the Double Standard
Pam Bondi, Florida’s Attorney General, just filed suit against two foreclosure rescue firms, asserting MGD Management and CRS Marketing promised homeowners they could live in their homes for three years, payment-free, but provided such homeowners no services. Lest there be any ambiguity, I’m appalled at this type of misconduct, and I’ve spoken out about it previously, including here and here. Quite simply, it’s disgusting to promise help to distressed homeowners, take their money, and do nothing, and anyone who does deserves punishment.
At the same time, though, I’m bitterly disappointed that the Attorney General is only taking such actions against those who side with homeowners. In my eyes, an enormous double standard has emerged in the foreclosure industry, one where consumer advocates are punished with more frequency and more severity than those on the bank side. To illustrate, consider this …
Just days prior to Bondi’s announcement that she was suing MGD Management and CRS Marketing, Bondi announced that she was appealing the Fourth District Court of Appeal’s ruling which quashed a subpoena in which Bondi attempted to issue to Stern. What’s wrong with that, you ask? Isn’t that a pro-consumer? Well, appealing the denial of the subpoena may sound nice, but I see it as 100% lip service to consumer advocates, for three reasons:
1. An appeal will take many months, maybe longer. How much time is Bondi going to take to “investigate” Stern and other foreclosure fraudsters? And how many foreclosures will happen in the interim?
2. The entire concept of appealing this ruling is silly. Undoubtedly, Bondi can take action if she chooses merely by issuing a new subpoena! Bear in mind, the Fourth District opinion doesn’t say that Bondi can’t sue Stern or that she can’t investigate Stern, merely that she can’t issue an investigative subpoena pursuant to the Florida Unfair and Deceptive Trade Practices Act. (The subpoena was also deemed overbroad, which is an easy problem to fix via a new subpoena.)
There are many ways to skin a cat. Bondi doesn’t have to limit herself to an investigative subpoena under FDUTPA. Instead, Bondi could file suit (just like she did against MDG Management and CRS Marketing), or she could issue a subpoena under some other statute/law. By failing to do so, and instead continuing to chase the rabbit down this one trail, Bondi has made it clear that, as far as the banks go, she’s more concerned with creating the impression that she’s doing something rather than actually doing something.
3. Perhaps most significantly, how much “investigating” does Bondi need to do against Stern? I mean, seriously … how much “investigating” does anyone need? Bear in mind, virtually everyone in the foreclosure industry knows Stern committed fraud and other misgivings on a massive, widespread basis. Stern’s own clients fired him, then refused to pay his invoices. For many months after Stern abandoned his pending cases, refusing to even withdraw as counsel in thousands of pending foreclosure cases, attorneys from both sides would identify cases that Stern had handled to Florida judges as “an old Stern case” … the implication being there were problems/errors with the file. I heard that phrase many, many times – and not once did I ever hear anyone, including a judge, ask “what does that mean?” Everyone knows.
If that’s not enough, take a close look at the lawsuit filed by DJSP Enterprises against Stern and his law firm, which asserts Stern engaged in a systemic and ongoing pattern of:
systematically falsifying and/or backdating pertinent legal documents, submitting such documents to the courts, routinely misplacing and losing original key documents, filing foreclosures with inaccurate and/or incomplete documents, prosecuting foreclosure cases without obtaining proper service of process …
cutting corners in the foreclosure process without following the rule of law …
systematically operating in an unlawful manner …
intentionally perpetuating a fraud on the courts by, inter alia, systematically filing forged documents, forging signatures on such documents, fraudulently backdating documents, improperly notarizing and witnessing documents, fabricating documents, signing affidavits without reviewing or verifying the information combined therein, filing foreclosures with inaccurate and/or incomplete information …
direct[ing] employees to purposefully overlook glaring inaccuracies in foreclosure pleadings and to essentially rubber stamp computer generated documents without reviewing or verifying the accuracy of the documents …
order[ing new attorneys] to sign legal filings and pleadings without reading them … As a result, false and inaccurate documents were routinely executed and filed with the courts in an effort to hasten foreclosure proceedings and illegally obtain final judgments of foreclosure …
incentiviz[ing] these unscrupulous and unlawful practices by giving their employees bonuses and extravagant gifts for churning out the highest number of foreclosure cases in the least amount of time …
Mind you, those claims aren’t being brought by me or a homeowner looking for a free house … this lawsuit was filed by Chardan 2008 China Acquisition Corp., better known as the company to whom Stern sold his back-room, “non-legal” foreclosure operations. That sounds shady (and it is – what “non-legal” foreclosure operations could be done in foreclosure cases on this level?), but, personally, I can hardly fathom a better source of information than the company that’s been running Stern’s operations. Who knows Stern’s fraudulent schemes better than his co-conspirators? Yet Bondi still wants to waste time appealing an investigative subpoena under FDUTPA … seriously?
Do you see the double standard yet? Fraud by consumer advocates gets met with lawsuits, but massive, widespread, admitted fraud on the bank side … known by everyone involved … gets ”investigated” down a rabbit trail for months on end, ad infinitum.
As if that’s not bad enough, this is the same David Stern that is still a member in good standing with The Florida Bar. Respectfully, I will never understand that one. This is an attorney who has a prior disciplinary history, who abandoned thousands of cases without withdrawing, who was fired by his own clients for fraud, whose employees testified they were ordered to commit fraud as a regular part of their jobs … and who walks around free to practice law per The Florida Bar. How can that be? Seriously, I’m asking – how can that be?
Meanwhile, Erin Cullaro is now on a Bar grievance committee, where she will help The Florida Bar evaluate the misconduct of other Florida attorneys. Mind you, this is the same Erin Cullaro who was just fired by the Attorney General’s office after a huge scandal where her signature was forged repeatedly, apparently with her consent, as part of the help she provided to the foreclosure mills in prosecuting foreclosure cases. Call me crazy, but Erin Cullaro isn’t the person who should be evaluating the misconduct of others.
So foreclosure rescue scams get prosecuted and/or sued, while foreclosure fraudsters for the banks get “investigated” without any real punishment. Stern still has a Bar license, Cullaro not only gets a pass, but she’s on a grievance committee, while foreclosure defense attorneys … well, I won’t go there. Instead, I will ask … Isn’t it time the double standard for foreclosure fraud gets eliminated, and those who help the banks are met with the same penalties and punishments as those helping consumers?
Mark Stopawww.stayinmyhome.com
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