The case file cited below relates to a civil — not a criminal — investigation. The existence of an investigation does not constitute proof of any violation of law.
Case Number:
L11-3-1012
Subject of investigation:
Ben-Ezra & Katz, P.A. and Marc A. Ben-Ezra, Individually and Marvin Katz, Individually
Subject’s address:
2901 STIRLING ROAD SUITE 300 FT. LAUDERDALE FL 33312 US
Subject’s business:
law firm/using deceptive paperwork to foreclose; obtain attorney’s fees which become the ultimate responsibility of the homeowner/defendant and calculate the indebtness of the homeowner/defendant.
Allegation or issue being investigated:
In apparent violation of Florida Statute 501 Part II, appears to be fabricating and/or presenting false and misleading documents in foreclosure cases. These documents have been presented in court before judges as actual assignments of mortgages and properly prepared affidavits that have later been shown to be legally inadequate and/or insufficient. Presenting and preparing faulty paperwork to use to foreclose; to collect attorney fees and to create affidavits of indebtness.
AG unit handling case:
Economic Crimes Division in Ft. Lauderdale, Florida
Now this is not cool. Last time there was a lot of hate going around from employees of the first Mill that Fannie let go. These employees should not be at all surprised as they saw this coming. Not only are these employers jeopardizing their business but the jobs of their staff.
By Diane C. Lade, Sun Sentinel
6:13 p.m. EST, February 14, 2011
A Hollywood law firm that processes thousands of foreclosures for major lenders laid off almost half of its 568 employees Monday, days after the government-owned mortgage giant Fannie Mae pulled its files from the practice.
Ben-Ezra & Katz, in a memo released by a company spokesman, said the firm was “forced to take this action after Fannie Mae surprisingly terminated its relationship with the firm.” In a notice sent five days ago, Fannie Mae officials said all exisiting foreclosures, mediations and bankruptcies needed to be transferred to other loan servicers by Tuesday, citing “document execution” issues.
Ben-Ezra officials issued a statement last week, saying the question was whether correct original documents were attached to each foreclosure filing. The law firm said it already had notified Fannie of the “technical paperwork issues” and had created a plan to mediate them, but the mortgage backer suddenly decided to cut ties.
It’s unknown how many foreclosures are involved. Statewide, Ben-Ezra & Katz has handled at least 18,000 cases, according to Legalprise, a West Palm Beach data analysis firm.
It’s a Louisiana bankruptcy case involving a single foreclosure that best illustrates the problems with the banks’ outsourcing their mortgage default work to LPS or similar entities. During a bankruptcy, foreclosure is forbidden without the judge’s permission, so LPS is frequently involved in seeking that permission.
In that Lousiana case, involving the bankruptcy of Ron and La Rhonda Wilson, LPS is facing sanctions for allegedly committing perjury during a hearing held to find out why the bank — Option One — twice asked the bankruptcy court for permission to foreclose when the debtors were current on their mortgage. LPS insists it did not intend to mislead the court.
Just yesterday I was lamenting the absence of any sanction against Ben-Ezra & Katz for its ongoing and systemic fraud on the courts, per Fannie Mae, which fired the foreclosure mill. Today, I got some insight into the fraud, and it’s not pretty. To illustrate, read this Order to Show Cause. I promise – it’s a whopper.
Apparently, Ben-Ezra filed a foreclosure suit with a lost note count, then filed an “original” note signed by an entirely different defendant on an entirely different property, along with a fraudulent assignment of mortgage. The Court entered summary judgment, then, upon realizing the fraud, directed Ben-Ezra & Katz to show cause why they should not be held in contempt of court.
WASHINGTON — The new head of the American Conservative Union, the group which hosts the annual Conservative Political Action Conference, has ties to the ongoing controversy surrounding fraud in the foreclosure process.
New ACU leader Al Cardenas is a partner in the law firm of Tew Cardenas LLP, which is currently defending “foreclosure king” David Stern, whose own law office is at the center of a major Florida investigation into foreclosure fraud. Mortgage companies hire the Law Offices of David J. Stern, frequently referred to as a “foreclosure mill,” to handle their foreclosure paperwork for them. Stern’s employees have testified that the office was a hotbed for illegally robo-signed foreclosure documents, with some employees churning out 1,000 improperly signed documents every day.
Federal mortgage giant Fannie Mae has cut ties with a second South Florida law firm handling its foreclosure cases, requiring an immediate transfer of those files to other attorneys and likely causing more turmoil in the state’s foreclosure courts.
The termination of its relationship with the Fort Lauderdale firm of Ben-Ezra & Katz, P.A. was announced today in a notice to loan servicers. The notice says payments to the firm should be stopped immediately and gives servicers a Feb. 15 deadline to find new firms to handle the Ben-Ezra & Katz files.
“Fannie Mae has become aware of certain document execution issues at the Ben-Ezra law firm regarding its processing of foreclosure cases on our behalf,” said Fannie Mae spokeswoman Amy Bonitatibus.
“It is our expectation that law firms will handle matters in strict compliance with proper procedures, ethical codes of conduct and legal requirements.”
Ben-Ezra & Katz has represented banks in 508 Palm Beach County foreclosure cases in the past two years where the homes were ordered to auction.
UNITED STATES TRUSTEE’S POST-TRIAL BRIEF IN LIEU OF CLOSING
ARGUMENT
TO THE HONORABLE ELIZABETH W. MAGNER:
Henry G. Hobbs, Jr., the Acting United States Trustee for Region 5 (“United States Trustee”), files this brief in lieu of closing argument, per the Court’s directive at the conclusion of evidence on December 1, 2010. This brief, and the December 1, 2010 trial, relate to the May 21, 2010 Motion for Sanctions filed by the United States Trustee (“Motion”). The Motion seeks sanctions against the respondent, Lender Processing Services, Inc., f/k/a Fidelity National Information Services, Inc. (“Fidelity”), pursuant to the Court’s inherent power to sanction bad faith conduct and under 11 U.S.C. § 105(a) to prevent an abuse of process.
I. SUMMARY OF ARGUMENT
Fidelity permitted its officer, Dory Goebel, to give materially misleading testimony to the Court on August 21, 2008, and should be sanctioned. It is undisputed that important parts of Goebel’s testimony were untrue; the crux of the matter now is determining Fidelity’s level of culpability. The evidence proves that, at a minimum, Fidelity acted with indifference to the truth in permitting Goebel to give the misleading testimony. The United States Trustee has met his burden of proof, which is a mere preponderance of the evidence. The sanctions available to this Court, through its inherent authority and 11 U.S.C. § 105 (a), range from financial sanctions to injunctive relief.
4 Q. You contend that Exhibit 1 is the document
5 that authorizes you to sign on behalf of Countrywide Home
6 Loans Servicing LP?
7 A. Yes.
8 Q. Okay. How so?
9 A. Countrywide Financial Corporation
10 actually — let me correct myself.
11 The plaintiff, as listed in this particular
12 case, is owned by Countrywide Financial Corporation.
13 It’s one of their entities.
14 Q. Okay. And how do you come to that
15 information?
16 A. Because I know it. I’ve been doing it for
17 a long time. I’ve — I don’t remember at what point in
18 time I found out that knowledge, but I’ve had it.
19 Q. Okay. Now, is Countrywide Home Loans
20 Servicing LP, to your knowledge, a separate corporate
21 entity from Countrywide Financial Corporation?
22 A. I don’t know.
<SNIP>
1 Q. And was that the situation back in December
2 of 2008 when you executed the assignment?
3 A. Yes. 4 Q. Okay. At that time, who was the owner of
5 the beneficial interest in the mortgage?
6 A. The beneficial interest in the note was
7 held by Fannie Mae. The interest in the mortgage was as
8 to, arguably, the interest in the mortgage was both
9 entities, the plaintiff and the Fannie Mae. 10 Q. Do you have any documents establishing your
11 authority to execute any assignments on behalf of Fannie
12 Mae?
13 A. Did I bring them? What? Say that again.
14 Sorry. 15 Q. Do you have any documents indicating your
16 authority to execute assignments on behalf of Fannie Mae?
17 A. I don’t know. 18 Q. Fannie Mae — excuse me.
19 The mortgage is to secure the note, right?
20 A. The mortgage follows the note, yes. 21 Q. Okay. And if Fannie Mae has the note, they
22 have to transfer or assign their interest in that note —
23 MR. ROSENQUEST: Object to form.
24 BY MR. FLANAGAN: 25 Q. — to someone else.
<SNIP>
20 Q. Okay. Does the name R.K. Arnold mean
21 anything to you?
22 A. No. 23 Q. Do you know Mr. Arnold, who is the
24 president of MERS?
25 A. No. 1 Q. You never heard of him?
2 A. No. 3 Q. If he stated that in order to be a
4 certifying officer and sign an assignment on behalf of
5 MERS somebody needed to pass and complete an examination,
6 is that something that is familiar to you?
7 A. It’s not familiar to me, no. I don’t know. 8 Q. Okay. That was not something that you had
9 to do.
10 A. I did not do that. 11 Q. Okay. And if he’s saying that, if that was
12 a rule or a qualification, that was something that was
13 not made known to you.
Before you go to the deposition, take a look at R. K. Arnold’s reply to one of Senator Brown’s questions on the hearing for “Problems in Mortgage Servicing From Modification to Foreclosure” on November 15, 2010.
Alter Ego – Piercing the Corporate Veil of DJSP BVI
99. The Plaintiffs, on behalf of themselves and other persons similarly situated, repeat and reallege
the allegations of the preceding paragraphs as if fully restated herein.
100. As alleged above, at all relevant times herein, DJSP BVI, by its complete exercise of
dominion and control, is the alter ego of DJSP FL, DAL Group and its operating subsidiaries
DJS Processing, Professional Title, and Default Servicing, which constitute a single employer.
Indeed, as set forth above, there is a high interdependency of operations; there is commonality
between management, directors and officers; there is a consolidation of financial, strategic, legal
and human resources operations; and, at all relevant times, DJSP BVI has used and continued to
use DAL Group and its operating subsidiaries and the assets of these entities for its own
purposes.
COUNT II
Alter Ego – Stern
103. The Plaintiffs, on behalf of themselves and other persons similarly situated, repeat and reallege
the allegations in paragraphs one through eighty-five (1-85) as if fully restated herein.
104. As alleged above, at all relevant times herein Stern, by his complete exercise of dominion
and control over said entities, is the alter ego of DJSPA, DJSP BVI, DJSP FL, DAL Group and
its operating subsidiaries DJS Processing, Professional Title, and Default Servicing. The
foregoing entities combine to constitute a single employer, all under the direction and control of
Stern personally. Indeed, as set forth above, there is a high interdependency of operations; there
is commonality between management, directors and officers; there is a consolidation of financial,
strategic, legal and human resources operations; and, at all relevant times, Stern has used and
continued to use DJSPA, DJSP BVI, DJSP FL, DAL Group and its operating subsidiaries and the
assets of these entities for his own purposes.
A statewide class action in which Massachusetts homeowners accuse U.S. Bancorp and Ally Financial Inc. of faulty foreclosures will resume now that the state’s high court ruled in a similar case last week.
The litigation was on hold while the Supreme Judicial Court decided whether state law required foreclosures to be conducted by the mortgage owner. The high court ruled Jan. 7 in U.S. Bank v. Ibanez that an industry practice allowing post-foreclosure assignments violated state law.
“This is a statewide class action and it’s going to bring relief to all of the people who are dispossessed homeowners in many instances,” Kevin Costello, a lawyer for the borrowers, said in a telephone interview today. Costello said he will file a motion to restart evidence gathering in the case today.
Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether hundreds of thousands of foreclosures were properly documented as the housing market collapsed.
Unwinding of foreclosures may lead to loan workouts with homeowners or force originators to buy back loans that ended up in mortgage-backed securities.
CLASS ACTION COMPLAINT
PURSUANT TO RULE 23 OF THE
OHIO RULES OF CIVIL
PROCEDURE, FAIR DEBT
COLLECTION PRACTICES ACT,
SLANDER OF CREDIT, ABUSE OF
PROCESS AND MALICIOUS
PROSECUTION
By Thom Weidlich and Karen Freifeld – Dec 8, 2010 12:01 AM ET
Steven J. Baum’s New York foreclosure law firm has attracted lawsuits and fines for its actions during the housing crisis, with one judge likening its conduct to something out of the “Twilight Zone.”
As recently as last month, Baum’s firm, which one lawyer for homeowners said processes about half the foreclosures in New York state, was ordered to pay $14,532.50 in legal fees and costs and a $5,000 fine by Nassau County District Court Judge Scott Fairgrieve in Hempstead, New York.
The judge said that when Paul Raia refused to vacate a Garden City co-op after foreclosure, Baum’s firm filed an eviction petition that misidentified the lender.
“Falsities were contained in five paragraphs out of only ten paragraphs in the entire petition,” Fairgrieve wrote in his Nov. 23 decision.
All 50 U.S. state attorneys general are investigating whether banks, loan servicers and law firms properly prepared documents to justify hundreds of thousands of foreclosures. The probe came after JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp. froze foreclosures nationwide.
Steven J. Baum PC, located in Amherst, New York, just north of Buffalo, has been accused of overcharging, filing false documents and representing parties on both sides of a mortgage transfer. Baum runs the firm his father founded in 1972, according to a fact-sheet provided by Earl V. Wells III, his spokesman.
Syracuse Grad
Baum is a graduate of Syracuse University, got his law degree from the State University of New York at Buffalo and was admitted to practice law in 1987, according to Martindale.com, a legal directory. Baum answered some questions via e-mails.
“Consumer activists and attorneys representing homeowners have their own agenda in this process, including degrading the legal work we conduct on behalf of our clients by using terms like ‘foreclosure mill’ which I find personally and professionally insulting,” he wrote.
At a continuing-education training session a couple of years ago, “Steven Baum himself said they did 49 percent of foreclosures” in the state, Rebecca Case-Grammatico, staff attorney at Rochester, New York-based Empire Justice Center, which represents poor people in foreclosures, said in a phone interview. A complaint in one lawsuit against Baum’s firm says it is “believed to be the largest foreclosure mill in the State of New York.”
Baum declined to comment on the size of his business.
Pillar Processing
A company that processes foreclosure documents shares an address with his law firm. That company, Pillar Processing LLC, is owned by Manhattan private-equity firm Tailwind Capital LLC, according to its website. Brooke Gordon, spokeswoman for Tailwind Capital, declined to comment.
“He’s opposing counsel for us on a huge percentage of our cases,” Meghan Faux, project director of the Foreclosure Prevention Project at South Brooklyn Legal Services, who represents homeowners in predatory-lending cases, said in a phone interview.
New York State Supreme Court Justice Arthur M. Schack in Brooklyn called the firm’s explanations in one case “so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling.”
Schack threw out the case in part because he said the assignment of the loan had been done improperly. The assignment was made by a Baum lawyer on behalf of Mortgage Electronic Registration Systems Inc. as the nominee for the mortgage bank, according to the judge’s opinion. The same day, the Baum firm represented the buyer of the loan by filing the foreclosure action, the judge said. Schack said it was a conflict for the firm to represent both sides.
‘Parallel Mortgage Universe’
“Steven J. Baum PC appears to be operating in a parallel mortgage universe, unrelated to the real universe,” the judge wrote in that May decision. “Next stop, the Twilight Zone,” he said, quoting from Serling’s TV series about science fiction and the supernatural.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
RENAE MOWAT, NIKKI MACK,
ARKLYNN RAHMING, and QUENNA HUMPHREY individually
and on behalf of all other similarly situated individuals,
Plaintiffs,
vs.
DJSP ENTERPRISES, INC., a Florida Corporation, DJSP
ENTERPRISES, INC., a British Virgin Islands Company,
and LAW OFFICES OF DAVID J. STERN, P.A.,
DAVID J. STERN, individually,
Defendants.
______________________________________/
EXCERPT:
CLASS ACTION COMPLAINT
Plaintiffs Renae Mowat, Nikki Mack, Arklynn Rahming, and Quenna Humphrey individually and on behalf of all others similarly situated, for their Complaint against Defendants, DJSP Enterprises, Inc., a Florida corporation, DJSP Enterprises, Inc., a British Virgin Islands Company, (collectively hereinafter referred to as “DJSP”), Law Offices of David J. Stern, P.A., (“Stern, P.A.”) and David J. Stern (“Stern”) state as follows:
NATURE OF CASE
1) Plaintiffs bring this action on behalf of themselves and other similarly situated former employees who worked for the Defendants in Plantation, Florida and who were terminated as a consequence of mass layoffs by the Defendants beginning on September 23, 2010 and who were not provided sixty (60) days advance written notice of the mass layoffs by Defendants as required by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.
(“WARN Act”).
2) Plaintiffs and all similarly situated employees seek to recover back pay for each day of WARN Act violation and benefits under 29 U.S.C. § 2104.
3) This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1334 and 1367, as well as 29 U.S.C. §§ 2102, 2104(a)(5).
4) Venue over this matter is appropriate in this Court pursuant to 29 U.S.C. 2104(a)(5) because the acts constituting the violation of the WARN Act occurred, and the claims arose in this district. Venue is also proper under 28 U.S.C. §1391(a) and (b). The acts complained of occurred in the State of Florida and, at all relevant times, material hereto, the Defendants conducted business with and through the other named Defendants who also conducted business with and through the other Defendants and their subsidiaries and the named individual Defendant, David J. Stern, resides in this judicial district, and all of or a substantial part of the events or omissions giving rise to this action occurred in this judicial district.
2010 NY Slip Op 52003(U)
Decided on November 23, 2010
District Court Of Nassau County, First District
Fairgrieve, J.
Steven J. Baum, P.C., Attorneys for Petitioner, 220 Northpointe Parkway, Suite G, Amherst, New York 14228, 716-204-2400;
Jeffrey A. Seigel, Esq., Volunteer Lawyers Project, Attorneys for Respondent, One Helen Keller Way, Hempstead, New York 11550, 516-292-8299.
Scott Fairgrieve, J.
On January 5, 2010, Wells Fargo Home Mortgage, Inc. (“Wells Fargo”) was the successful bidder at the foreclosure sale of the subject premises known as 360 Stewart Avenue, Unit 1E, Garden City, New York. Wells Fargo received 220 shares of Stewart Franklin Owners Corp., as well as the proprietary lease previously owned by the Respondent, Paul Raia.
On March 12, 2010, Wells Fargo purportedly assigned its January 5, 2010 bid to Petitioner Federal Home Loan Mortgage Corp. (“FHLMC”). However, the “Assignment of Bid” contains only the signature of Steven J. Baum, P.C., and there is no indication for which party the signature was made. Mr. Baum’s office claimed to have the authority to execute the document on behalf of FHLMC by way of a power of attorney attached to the petition. Baum’s office also claimed to have the same authority for Wells Fargo, although Baum’s office provides no evidence in support of that allegation.
EXCERPTS:
Baum has recently faced numerous standing issues concerning assignment, for which its cases were dismissed.
The opinion continues on to state that the “court’s inherent power to impose sanctions is particularly appropriate where fraud, deception, and misrepresentation has been practiced upon the Court.
The fraud perpetrated on the court here occurred when petitioner’s attorney swore that the petition had been read and that the contents of the petition were true to the deponent’s own knowledge. Sanctions may attach to attempts to deceive the court.
CONCLUSION
In view of the foregoing, Steven J. Baum, P.C. must compensate Volunteer Lawyers Project in the amount of $14,532.50 for reasonable attorney’s fees and disbursements within 30 days of the date of this order. Further, this court imposes monetary sanctions in the amount of $5,000.00 on Steven J. Baum, P.C. payable to “Lawyers’ Fund for Client Protection,” established pursuant to section 97-t of the State Finance Law, within 30 days of the date of this order. The clerk of the court is directed to give notice, pursuant to 130-1.3, to the Lawyers’ Fund for Client Protection concerning this award of sanctions.
(735 ILCS 5/15-1504) (from Ch. 110, par. 15-1504)
Sec. 15-1504.
Pleadings and service.
(a) Foundational requirements for affidavits. Every
affidavit filed in a foreclosure proceeding shall include a
detailed description of the basis of the affiant’s claimed
personal knowledge of the facts set forth in the affidavit,
including:
(1) a statement of which specific data systems the
affiant queried in preparing the affidavit, if the affiant
queried data systems in preparing the affidavit;
(2) a detailed factual statement of the basis of the
affiant’s belief that each data system identified
contained accurate information; and
(3) if applicable, a detailed description of the basis
of the affiant’s statement that the attached mortgage and
note are true and correct.
(b) Lost note affidavit. A copy of the mortgage and note
secured thereby shall be attached to the foreclosure complaint.
If any note required to be attached to a complaint filed
pursuant to this subsection (b) cannot be located for filing as
an exhibit, the moving party shall file an affidavit stating
the following:
SFF has posted numerous court orders involving this firm and nothing has come about the fraud they are submitting and swearing to under oath. Shocking.
Lets set aside that these are FORECLOSURES for a second…T h e s e a r e o f f i c e r s o f t h e c o u r t [PERIOD END OF STORY], intentionally submitting bogus, fraudulent documents even after they were made aware of new filing requirements.
“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs–such as a family home–during this period of economic crisis,” said New York State Chief Judge Jonathan Lippman in a statement.
Judge Melvyn Tanenbaum suspends the following cases
Excerpt:
This Court has repeatedly directed plaintiffs counsel to submit proposed orders of reference
and judgments of foreclosure in proper form and counsel has continuously failed to do so. The Court
provided counsel’s office directly with copies of orders and judgments which would satisfy the
requirements and counsel has responded by submitting correspondence addressed to the Court from
non-attorney employees with improper and inadequate submissions. The Court deems plaintiffs
counsel’s actions to be an intentional failure to comply with the directions of the Court and a
dereliction of professional responsibility. Accordingly it is…
Continue to the Orders All The Way Down…
.
Another 18 reasons why an Investigation should be in order…some of us are keeping track and trust me there is many more!
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
—————————————————— x Case No. 07-11862
In re:
RON WILSON :
LaRHONDA WILSON, :
: Chapter 13
:
Debtors. :
——————————————————x STIPULATION AND ORDER
R. Michael Bolen, the United States Trustee for Region 5 (“United States Trustee”) and
The Boles Law Firm APC, (“Boles”), hereby enter into a consensual resolution resolving the
United States Trustee’s inquiry and litigation against Boles in this case. The parties have agreed
to the terms of the instant stipulation and order (the “Stipulation”), establishing protocol for
procedures to be employed by Boles prior to filing motions seeking relief from the automatic
stay, proofs of claims, and other papers (collectively referred to as a “Pleading” or “Pleadings”)
filed in bankruptcy courts including the United States Bankruptcy Court for the Eastern District
of Louisiana. The United States Trustee and Boles consent and agree as follows:
Today DJSP Enterprises Inc. announced Mark P. Harmon has resigned from the Board of Directors of the Company and the Board of Managers of DAL Group, LLC, a subsidiary of the Company.
![[VIDEO] 4 Former Employees Sue Law Offices Of David J. Stern P.A., DJSP](https://stopforeclosurefraud.com/wp-content/themes/gazette/thumb.php?src=wp-content/uploads/2010/12/djsp_logo3.png&w=100&h=57&zc=1&q=90){kind=logo}
Recent Comments