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Lorraine Brown, Former Head of DOCX (LPS), Pleads GUILTY to CRIMINAL Conspiracy, Faces up to 5 Yrs in Prison

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Lorraine Brown, Former Head of DOCX (LPS), Pleads GUILTY to CRIMINAL Conspiracy to Commit Mail and Wire Fraud

Over 1 Million Documents Prepared and Filed with Forged and False Signatures, Fraudulent Notarizations

WASHINGTON – A former executive of Lender Processing Services, Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – pleaded guilty today, admitting her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.

The guilty plea of Lorraine Brown, 56, of Alpharetta, Ga., was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Middle District of Florida, Robert E. O’Neill; and Michael Steinbach, Special Agent in Charge of the FBI’s Jacksonville Field Office.

The plea, to conspiracy to commit mail and wire fraud, was entered before U.S. Magistrate Judge Monte C. Richardson in Jacksonville federal court. Brown faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the crime. The date for sentencing has not yet been set.

“Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis,” said AAG Breuer. “She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers, and others. Appropriately, she now faces the prospect of prison time.”

“Homeownership is a huge step for American citizens,” said U.S. Attorney O’Neill. “The process itself is often intimidating and lengthy. Consumers rely heavily on the integrity and due diligence of those serving as representatives throughout this process to secure their investments. When the integrity of this process is compromised, illegally, public confidence is eroded. We must work to assure the public that their investments are sound, worthy, and protected.”

Special Agent in Charge Steinbach stated, “Our country is increasingly faced with more pervasive and sophisticated fraud schemes that have the potential to disrupt entire markets and the economy as a whole. The FBI, with our partners, is committed to addressing these schemes. As these schemes continue to evolve and become more sophisticated, so too will we.”

Brown was the chief executive of DocX LLC, which was involved in the preparation and recordation of mortgage-related documents throughout the country since the 1990s. DocX was acquired by an LPS predecessor company, and was part of LPS’s business when LPS was formed as a stand-alone company in 2008. At that time, DocX was rebranded as “LPS Document Solutions, a Division of LPS.” Brown was the president and senior managing director of LPS Document Solutions, which constituted DocX’s operations.

DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices. Only specific personnel at DocX were authorized by the clients to sign the documents.

According to plea documents filed today, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Unbeknownst to the clients, Brown directed the authorized signers to allow other DocX employees, who were not authorized signers, to sign the mortgage-related documents and have them notarized as if actually executed by the authorized DocX employee.

Also according to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to sign as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.

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. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.

Brown also admitted that she and others also took various steps to conceal their actions from clients, LPS corporate headquarters, law enforcement authorities and others. These actions included testing new employees to ensure they could mimic signatures, lying to LPS internal audit personnel during reviews of the operation in 2009, making false exculpatory statements after being confronted by LPS corporate officials about the acts and lying to the FBI during its investigation. LPS closed DocX in early 2010.

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

Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 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’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

SOURCE: http://www.justice.gov

PLEA AGREEMENT

Pursuant to Fed. R. Grim. P. 11 (c), the United States of America by and through United States Attorney for the Middle District of Florida Robert E. O'Neill and United States Department of Justice Criminal Division - Fraud Section Chief Denis Mcinerney (hereinafter also referred to as "the Government" or the "United States"), and the defendant Lorraine Brown with defendant's attorney Mark Rosenblum, Esq., agree as follows:

A. Particularized Terms

1. Count Pleading To

The defendant shall enter a plea of guilty to Count One of the Information. Count One charges the defendant with Conspiracy to Commit Mail and Wire Fraud, in violation of 18 U.S.C. § 371.

2. Maximum Penalties

Count One carries a maximum sentence of up to five (5) years imprisonment, a fine of up to a fine of up to $250,000 or twice the gross pecuniary gain or twice the gross pecuniary loss occasioned by the offense, a term of supervised release of not more than three (3) years, and a special assessment of $100, said special assessment to be due on the date of sentencing. With respect to certain offenses, the Court shall order the defendant to make restitution to any victim of the offense, and with respect to other offenses, the Court may order the defendant to make restitution to any victim of the offense, or to the community, as set forth below.

3. Elements of the Offense

The defendant acknowledges understanding the nature and elements of the offense with which defendant has been charged and to which defendant is pleading guilty.

The elements of Count One are:

First: That two or more persons, in some way or manner,agreed to try to accomplish a common and unlawful plan to commit mail fraud or wire fraud, as charged in the information;

Second: The Defendant knew the unlawful purpose of the plan and willfully joined in it; and

Third: One of the conspirators committed an overt act in furtherance of the conspiracy.

Full Information and Plea Agreement below...

UPDATE: Brown Plea par deux -

Attorney General Koster announces plea agreement with
Lorraine Brown – Former President of DocX to plead guilty for national
mortgage document robo-signing practices

http://ago.mo.gov/newsreleases/2012/Attorney_General_Koster_announces_plea_agreement_with_Lorraine_Brown/

www.4closureFraud.org

 Lorraine Brown, Former Head of DOCX (LPS), Pleads GUILTY to CRIMINAL Conspiracy

 

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Wed, 11/21/2012 - 01:37 | 3001254 Boxed Merlot
Boxed Merlot's picture

Splitting a note from the payment stream? What ... does that even mean?

 

The term is bi-furcation and when it occurs, the agreement is technically dead.  The reason it dies is that, according to the terms of the agreement, if the borrowing party decides to stop servicing the note, which is legally allowed, the process of foreclosing is done in an orderly way that prevents neighboring properties from being adversely affected.

Because standing could not be proven by the holder of the servicing agreement, due to the deed being seperated, the physical property became an albatross in the neighborhood.  The structure was left to decay in an otherwise thriving neighborhood.  After a few of these properties show up on a city block, word gets around. 

 

Now, multiply that effect many times, and you can see why the entire central valley of California has suffered 50-80% declines in residential property values from their high water mark.

 

That's the real story here.  This outfit was a player in the whole scheme, an important player to be sure, but they just played their part. 

 

Without the clamoring of these fraudulent devices by government union pension funds, their reckless constructs would've never been allowed, imo.  But just because a junkie needs a fix, doesn't mean GS had to sell it to 'em. 

Wed, 11/21/2012 - 01:23 | 3001233 Tom Servo
Tom Servo's picture

Did you just wake up from a 5 year coma?  Do you honestly think who you send your mortgage check to actually HOLDS THE NOTE against your property?  I researched mine, and .... they don't.  Those fuck sticks at Fannie Mae do....

Thu, 11/22/2012 - 00:02 | 3003915 wareco
wareco's picture

Well Tom, unlike you, I have no mortgage on any of the 14 properties I currently own.  Cash is king ya know.  Thank God for all the deadbeats that have defaulted on their liar loans.  Without them, I wouldn't be making 6 figures flipping their houses.  Anyway, If I did have a mortgage payment to make, I'm reasonably sure the entity who was entitled to the money, would eventually get the money, whether directly from me or from the mortgage servicer.  Again, since apparently you failed to comprehend my earlier post, let me re-state my point.  If Bad Bank is wrongfully foreclosing on properties it has no legal interest in as some here suggest, how come Rightful Bank isn't suing Bad Bank for conversion and theft, as well as having the bank regulators shut the bank down?  Why?  Because it ain't happening.   What has happened is Bad Bank, which is legally entitled to the loan payments but can't prove it for a variety of reasons, manufactures paperwork in order to prove to a court that Bad Bank is the real party in interest in the foreclosure suit.  Bad Bank is not intentionally poaching loan proceeds and properties rightfully belonging to another bank.

Wed, 11/21/2012 - 10:30 | 3001754 Imminent Crucible
Imminent Crucible's picture

No, Tom. Wareco is still deep in his 5 year coma. Unless 'wareco' is just another alias that David J. Stern posts under. Ignorance is one thing. Cranial-rectal Insertion Syndrome is another.

We can explain it for him. We can't understand it for him.

Wed, 11/21/2012 - 01:16 | 3001224 jeff montanye
jeff montanye's picture

i for one am not convinced.  why the banks haven't cried foul is that the banks weren't screwed by these frauds (or helping busy people), the homeowners were.  all the lost notes, titles, etc. that were vouched for by, essentially, no one probably let some errors creep in.  everything was okayed and someone was required to pay something to someone at pain of loss of her/his home.  that doesn't seem quite fair, does it?

Tue, 11/20/2012 - 20:00 | 3000389 formadesika3
formadesika3's picture

Way to go Brownie!

/sarc

Wed, 11/21/2012 - 08:20 | 3001495 StychoKiller
StychoKiller's picture

She didn't build that fraud on her own...

Tue, 11/20/2012 - 19:44 | 3000349 SmittyinLA
SmittyinLA's picture

decades of "clouded" mortgages, trillions in losses, foreign treaties, seizures of resold homes by international courts aren't a problem?

They screwed title to America-literally, in exchange for a small commission on every fraud, private property rights and contract enforcement are the conerstone of our society, this to me is a death penalty offense. 

Tue, 11/20/2012 - 20:13 | 3000417 NotApplicable
NotApplicable's picture

It confuses the shit out of the Well's Fargo people when I advise them that the note they are servicing for XXXXXX is actually an unsecured debt.

"Sorry, my Deed of Trust says MERS on it. Tell me, what does your computer screen say?"

Tue, 11/20/2012 - 20:39 | 3000491 Rearranging Dec...
Rearranging Deckchairs's picture

Only thing is 1) this is an adversarial legal system which means one has to have a good financial reason to bring up the deficiencies in title (only those fighting foreclosure have adequate incentive) although people could wise up and intentionally default en mass and play chicken with the banks to produce the notes etc.  and 2) there are statutes of limitation for challenging the foreclosure. Remember MERS is owned by the title insurers and banks and they are still insuring titles ( as fraudulent as we all know those chains of title to be). 

For people buying a foreclosed property this is an issue for a couple of years. For everyone else its not really a concrete issue more of an abstract problem.

Now if for some reason Title insurers start refusing to insure titles en mass then we have a very serious concrete problem because you won't be able to finance it therefore its a cash only price for all RE which would make it all plumet about 90% in value overnight. 

 

Wed, 11/21/2012 - 07:27 | 3001425 Winston Churchill
Winston Churchill's picture

If you read the current title insurance policy's, they insure nothing.

So many exclusions that they are not even worth the paper  they are printed on.

Wed, 11/21/2012 - 00:35 | 3001160 RockyRacoon
RockyRacoon's picture

So much for the "victimless crime" as promoted by wareco above.  Clouded titles and the mess that has been filed away in courthouses all over the country are little-bitty time-bombs waiting to go off.   A seemingly honest and above board transaction to buy a house, and get good title, will result in heartache for many in the years to come.  That's not "victimless".

Wed, 11/21/2012 - 02:12 | 3001286 Rearranging Dec...
Rearranging Deckchairs's picture

If I actually owned a MERS house right now I would probably see if I could file a declarative relief action in federal court against MERS for declarative relief that they can't  foreclose and then not make payments and try a quiet title action to clean the title.Califonria  has a one action rule and a non deficiency statute for most first mortgages.

 

It would be worth it too damage my credit because I could turn around and sell the property without satisfying the mortgage that the prior action would have wiped out. Pay off my non dischargeable student loans but be cash rich.

 

Kind of surprised no one pised off at the bankers has tried this yet. I'll bet when they realize they lost you and then appeal and you beat them again they would try and buy one off lest it get out and destroy the entire banking system.

 

Someone who inherited a house subject to a deed of trust with MERS as the trustee should try this. It can't directly wreck credit if you aren't on the original note. But as current owner of the house you would presumably have standing.

 

 

Tue, 11/20/2012 - 19:22 | 3000304 NotApplicable
NotApplicable's picture

In other words, you have no idea what you're talking about.

Here's a clue. DOCX created papers AFTER THE FACT, to try and recreate a chain-of-title THAT NEVER EXISTED.

Why? In order to create an entity with the legal standing to foreclose.

Now, if you're paying attention, you might come to the conclusion that there is no longer anyone with legal standing.

Or, you might ignore reality, and play along with the charade as just another poo flinger.

Wed, 11/21/2012 - 01:39 | 3001260 putaipan
putaipan's picture

poo finger?   ... is that the new 'muppets' ?

Tue, 11/20/2012 - 17:27 | 2999959 treasurefish
treasurefish's picture

Sending her to the guillotine would be much more appropriate.

Wed, 11/21/2012 - 00:15 | 3001126 Urban Roman
Urban Roman's picture

Wonder if they'll discipline some of the judges who rubber-stamped these documents.

Wed, 11/21/2012 - 00:59 | 3001209 jeff montanye
jeff montanye's picture

apparently they are starting with the gentlemen of color and the ladies then working up to jon corzine.

or not.

Tue, 11/20/2012 - 22:45 | 3000898 Chuck Walla
Chuck Walla's picture

Dumb ass. She should have done it all outside a Philly voting center, then Holder might have looked the other way. Specially if she swung a "billy" while doing it.

FORWARD GULAG! 

Tue, 11/20/2012 - 21:05 | 3000589 eatthebanksters
eatthebanksters's picture

Unfortunately she will be well looked after by the likes of Jamie, Lloyd and more than a few others for falling on the sword.

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