Sun-Sentinel-

Former employees of Plantation attorney David J. Stern agreed to a preliminary $502,000 settlement after he fired them without giving the required 60-day notice as business at his foreclosure law firm began to dry up.

U.S. District Judge Robert N. Scola Jr. found the settlement “sufficiently fair, reasonable, adequate and in the best interests” of the former workers, according to a preliminary order. There will be a June 8 final hearing.

Workers in the class-action settlement now have until May 3 to opt out of the settlement, while papers in support of it should be filed by May 29.

[SUN-SENTINEL]

Oh my, look what we have here…big mistake because I don’t think this is going very far….his franchises that is.

Bill Warner Private Investigator-

My source in Fort Lauderdale tells me that attorney David J. Stern has rolled over his $Millions in foreclosure home profits and the cash he got up front from the DJSP Entreprises Inc. FKA Chardan 2008 China Acquisition Corp deal into at least 150 Five Guys Burger and Fries Franchise’s, will that be fries with your meal sir?

It appears that David J. Stern is buying ”Five Guys Burger and Fries Franchise’s” in bulk, Stern is trying to acquire 500 Burger Joints NATIONWIDE…

[BILL WARNER]

image: Bill Warner

Folks, please tweet, forward, whatever. This is a huge story that deserves to be given major coverage in MSM. Local judges need to be aware that they are being handed forged documents.

FDL-

In 2010, the Law Offices of David J. Stern spun off the robo signing document mill part of his business into a separate, publicly traded company.

Stern pocketed some $60 million from that deal. The investors got the company and all its documents, internal procedures and everything you would need in order to find out what really happened within the Stern document mill.

A little after 8 AM EST today, a filing went up on the SEC’s Edgar database. It’s a Complaint in lawsuit, dated yesterday.

[FIRE DOG LAKE]

Scribd

Mortgage Fraud

Law Offices of David J. Stern
ProVest
PTA

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

In the lawsuit filed by DJSP Enterprises against David J. Stern and the Law Offices of David J. Stern, there are also allegations involving ProVest, the process server used by Stern and most of the other major foreclosure mills hired by Lender Processing Services in over 20 states.

The allegations regarding ProVest are found in paragraphs 36-38:

36. Prior to the Transaction, the Seller Defendants also knowingly and systematically inflated their process of service costs to the Court. Specifically, Seller Defendants engineered a fraudulent scheme whereby they directed their process servicing work to a process servicing company called ProVest. The Seller Defendants caused each file to generate four or five separate fees for service of process regardless of whether service of process on multiple defendants was necessary or appropriate and regardless of whether service of process for multiple defendants could be achieved at the same address.

37. In exchange for receiving these inflated service of process fees, ProVest, in turn, routinely referred back to PTA servicing requests for “skip tracing” to locate defendants for whom ProVest purportedly did not have accurate street address information to effect service of process. ProVest “hired” and paid fees to PTA for “skip tracing” services despite the fact that ProVest had the ability and resources to perform “skip tracing” itself and routinely did so itself.

38. The Seller Defendants’ arrangement with ProVest amounted to a kickback scheme. DS Law padded and inflated its process servicing costs which were billed to its clients and added to the court costs assessed to foreclosure defendants. In exchange for feeding this work to ProVest, PTA earned manufactured “skip tracing” fees which inflated PTA’s revenues and profits and which represented another way in which the Seller Defendants artificially inflated the revenues of the Target Business prior to the Transaction.

Mortgage Fraud

DJSP Enterprises
Law Offices of David J. Stern

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

DJSP Enterprises, the publicly-traded company that was supposed to make millions for investors from the foreclosure services it provided to The Law Offices of David Stern (“the Stern Firm”), sued David J. Stern and the Law Offices of David Stern.

Stern Law mortgage foreclosure caseload rose from 15,000 in 2006 to 70,400 in 2009.

In 2009, Stern Law handled 20% of all foreclosures in Florida.

Stern Law’s clients included all 10 of the top 10, and 17 of the top 20 mortgage servicers in the U.S. including Fannie, Freddie, Citibank, BOA, Goldman Sachs, GMAC and Wells Fargo.

The non-legal, back room servicers related to foreclosures included REO services: property inspection, valuation, eviction, broker assignment – these were performed by DJSP Enterprises – the sole client was Stern Law.

Here are Paragraphs 29 -35:

29. The Seller Defendants fraudulently induced Plaintiffs DAL and DJSP into entering into the Transaction by fraudulently and artificially inflating the Target Business’ actual revenues, by intentionally failing to disclose that the Target Business and DS Law were not, in fact, operating in accordance with all applicable laws, and by concealing that DS Law was in jeopardy of losing its largest clients due to DS Law’s unlawful conduct. Indeed, before entering into the Transaction, the Seller Defendants knew that DS Law and the Target Business had been systematically falsifying and/or back-dating 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, and were in jeopardy of losing the Seller Defendants’ largest foreclosure clients due to such conduct.

30. By cutting corners in the foreclosure process without following the rule of law, the Defendants artificially reduced the expenses of the Target Business which falsely inflated the profitability of the Target Business.

31. To summarize, the Seller Defendants failed to disclose to DJSP and DAL that DS Law and the Target Business were systematically operating in an unlawful manner. In addition, the Seller Defendants failed to disclose to DJSP and DAL that the Target Business’ reported revenues were not accurate, inflated, and improperly calculated and that the expenses of the business were also distorted due to the systematic practices designed to “shorten” the legal process. The Seller Defendants falsely led DAL and DJSP to believe that they were acquiring a long-term profitable business that operated in accordance with all applicable laws to induce DAL and DJSP to enter into the Transaction.

33. Prior to the Transaction, the Seller Defendants were at all times well aware that DS Law and the Target Business were 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 contained therein, prosecuting foreclosure cases without obtaining proper service of process, and filing foreclosures with inaccurate and/or incomplete documents.

34. Indeed, the Seller Defendants directed employees of DS Law and the Target Business 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. New attorneys at DS Law were not only encouraged, but were even ordered 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 for the Seller Defendants’ clients.

35. The Seller Defendants even incentivized 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. The Seller Defendants encouraged contests between DS Law attorneys to see who could jam a foreclosure case through the courts the fastest.

H/T FloridaForeclosureFraudWebBlog

EXCERPTS:

Q Define “cradle to grave” in the context you
said it — meant it when you said it.

A When I speak of cradle to grave, that would be
that we provide services that may become necessary on a
default of loan on behalf of the client, so it generally
come in as a foreclosure. If the foreclosure is
interrupted by a bankruptcy, we will handle that
bankruptcy. Once the bankruptcy has been concluded and
we’re free — sorry — from the automatic stay, we would
then continue on with the foreclosure. Once the
foreclosure is complete and title invest in the
servicer, we would then handle any evictions where
necessary. Once the eviction is complete and it becomes
a real estate-owned property, we would then open the
title work and handle the closing on behalf of the
grantor, the bank as the seller, to the grantee.

Q And those systems that were used by the Law
Offices of David J. Stern, P.A., you developed?

A I — the day one, I developed them; day two,
they continued to be expanded and improved upon by
people that were smarter than I was in those particular
areas.

Q Okay. But would you agree with me certainly
until 2006, you were the captain of the ship with regard
to your office and how it ran and the systems that were
to be used?

A I would agree that I was the captain of the
ship. I would strongly disagree that processes were put
in — that were put in were put in by me. The
development, better practices, things like that, Miriam,
Sam, Beverly, when she joined, and Cheryl, did a lot of
that. So, there was — in 2000 — even in 2000, there
were procedures and policies put in place that they were
comfortable in doing and realized that I would have no
objection. If I had to deal with every granular change
that results from Fannie or Freddie guidelines or a
local rule or a judge making some sort of requirement,
that by definition would be an impossibility. Hence,
development expanding processes and procedures very
quickly fell on Miriam, Beverly and — and — and
Cheryl. I was there for the day-to-day probably up
until 2006. He had my nose and things, but it didn’t
take long to realize that. Sometimes you can’t be the
rainmaker and be involved in procedure because very
quickly, I did not know or have knowledge as to the
capabilities of the staff that was in place.

Q Did you ever object to any of the policies or
procedures that were put in place by others beside
yourself.

A I don’t I don’t recall. Apparently, not
very long or hard or I’ll stay with them in there.

Scribd

REWIND: Why is she complaining, after all didn’t she get her expenses paid and get a new BMW SUV fully paid by Law Offices of David J. Stern?

Excerpt from Depo of Kelly Scott-

8 Q. And what was said about Cheryl’s bills being paid for
9 the Law Offices of David Stern?
10 A. That he’s always done it. David Stern has always
11 paid for Cheryl’s expenses.
12 Q. Personal expenses?
13 A. Yes.
14 Q. Do you know if he — Well was there rumor — Was
15 there talk, rather, that he paid — that he bought her car?
16 A. No, that’s confirmed. He did buy her a car. I
17 acknowledge that.
18 Q. He did buy her a car?
19 A. Yes.
20 Q. What kind of car did he buy her?
21 A. It was a BMW SUV.

<SNIP>

Q. Anything that –
4 A. Is it like personal or business or –
5 Q. Personal? Business? Anything at all?
6 A. Personal? The only thing that I was aware of that
7 took place there were the perks that certain employees received
8 from David Stern. If they were either dating him or they were
9 good friends with him, that they would basically do certain
10 things for him for certain files, in the sense of like David
11 Vargas. He would have certain perks from David Stern, like a
12 house, a car, cell phone paid all by David Stern.
13 And that’s all I know.
14 Q. Okay. So do you know of any other perks besides what
15 you said that Cheryl Salmons got? A car you said, for sure.
16 And her personal bills paid.
17 A. Yes. And cell phone.
18 Q. And probably her mortgage?
19 A. Yes. And vacations and gifts, jewelry.
20 Q. Who else would received gifts and jewelry or cars or
21 homes?
22 A. His girlfriend and David Vargas.
23 Q. Who’s his girlfriend?
24 A. At the time it was Christina Dell’Aguila

Palm Beach Post-

A new deposition of Cheryl Samons, the once second-in-command of the Law Offices of David J. Stern, reveals the chaos that occurred last fall as the Florida attorney general’s investigation was announced, the robo-signing scandal broke and the largest foreclosure law firm in Florida began to implode.

The deposition, linked to on a foreclosure blog by defense attorney Michael Alex Wasylik, was taken in a class-action lawsuit filed by former Stern attorneys who allege they were terminated without the 60 days notice required by federal law and under the Worker Adjustment and Retraining Notification Act.

Samons was singled out last fall for her role in signing thousands of foreclosure documents that she had no personal knowledge of and for allegedly having her signature forged by employees who were pushed to speed the processing of foreclosure cases.

[PALM BEACH POST]

Scribd

RENAE MOWAT e t al.,

V.

DJSP ENTERPRISES, INC., et al.,

Scribd

Sun-Sentinel-

A federal magistrate in Miami has recommended that former employees of DJSP Enterprises, the legal processing arm of Plantation attorney David J.Stern’s once-powerful foreclosure law firm, be given class action status to sue Stern and his affiliates for violating federal labor laws.

The suit, filed on behalf of four employees but which could affect at least 700, claims workers were fired last fall without the 60 days notice required under the Worker Adjustment and Retraining Notification, or WARN, Act. The action seeks back pay and benefits.

[SUN-SENTINEL]

He operates the largest foreclosure law firm in the state, and these hard times have made Mark P. Harmon a very busy man. Some critics assail his tactics, but Harmon is unapologetic: Lenders, after all, need zealous lawyers, too.

BOSTON-

Devenia Mack doesn’t know Mark P. Harmon personally, but the Newton lawyer is intimately involved in her housing crisis. His company, Harmon Law Offices, was hired by Wells Fargo Bank last year to seize Mack’s Westminster ranch house by foreclosure.

His son, Andrew, signed the paperwork that transferred the mortgage to Wells Fargo.

His title company stamped the document notifying Mack that the bank was taking her home.

[...]

[BOSTON.com]

[image: Boston Globe]

BOSTON GLOBE-

State Attorney General Martha Coakley can continue her investigation into the practices of a Newton law firm that specializes in home foreclosures, a Suffolk Superior Court justice has ruled.

Justice Bonnie H. MacLeod denied a motion by Harmon Law Offices to set aside or alter a request for documents in the state’s investigation into allegations of “unfair and deceptive acts’’ related to the firm’s foreclosure and eviction work.

Coakley said the decision confirms her a …

[BOSTON GLOBE]

RENAE MOWAT e t al.,

v.
DJSP ENTERPRISES, INC., et al.,

Excerpt:

B. Stern and DJSPA as “Employers” under Single Employer Test

Plaintiffs argue that WARN Act liability is imputed to Stern and DJSPA under the single employer test. Stern and DJSPA contend that Plaintiffs fail to sufficiently allege all the elements of the single employer test.

Two or more affiliated businesses which constitute a “single employer” may be held jointly and severally liable for violations of the WARN Act. Pearson v. Component Tech. Corp., 247 F.3d 471, 478 (3d Cir. 2001). The Department of Labor (“DOL”) regulations issued under the WARN Act provide that two or more affiliated businesses may be considered a single business enterprise for WARN Act purposes. 20 C.F.R. § 639.3(a)(2). The regulations provide a five-factor balancing test to assess whether affiliated businesses constitute a “single employer,” which would subject them to joint liability under the WARN Act. See Pearson, 247 F.3d at 478.

The five DOL factors are as follows: (1) common ownership, (2) common directors and/or officers, (3) unity of personnel policies emanating from a common source, (4) dependency of operations, and (5) de facto exercise of control. Id. at 487– 490; 20 C.F.R. § 639.3(a)(2).

Plaintiffs adequately allege the five elements of the single employer test.

Continue below…

Scribd

David J. Stern to shut foreclosure practice

by Paola Iuspa-Abbott
piuspa@alm.com

This article is reprinted with permission from the Daily Business Review.

Scribd

You have to read Susan T. Martin’s article in the St. Pete Times…. She was one of the very first who exposed this foreclosure fraud way back and one who’s not afraid to say the f word… ” Fraudulent”.

Here’s a piece off the St. Pete Times:

In a letter dated March 4, Stern notified McGrady and other chief judges that as of March 31 the firm will end its involvement in all 100,000 foreclosure cases statewide in which it is still listed as attorney of record. Bank of America and other Stern clients jettisoned the firm last year because of its allegedly sloppy, fraudulent practices but in many cases have yet to hire anyone to replace him.

“It’s just put the brakes on being able to move forward in these thousands of cases we have, and so they either get counsel or get rid of the case,” McGrady said.

In his letter to the judges, Stern acknowledged that his firm is basically out of business.

“We have been forced to drastically reduce our attorney and paralegal staff to the point where we no longer have the financial or personnel resources to continue to file motions to withdraw in the tens of thousand of cases that we still remain as counsel of record,” he wrote. “Therefore it is with great regret that we will be ceasing the servicing of clients” by month’s end.