Two title officers employed by Lender Processing Services — one of the largest companies of its type, whose services are retained by virtually all of the top 50 banks in America — are facing lengthy jail sentences after a grand jury in Nevada on Wednesday handed down hundreds of felony counts against the pair for allegedly engaging in a scheme to file tens of thousands of fraudulent foreclosure documents.
Gary Trafford and Gerri Sheppard allegedly directed employees to notarize documents without a notary public present, provided false instruments for recording, and made false certifications, the state said. In all, 606 charges were filed against the two.
“The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008,” Chief Deputy Attorney General John Kelleher said in a media advisory.
“The State alleges that the defendants directed employees under their supervision, to forge their names on foreclosure documents, then notarize the signatures they just forged, thereby fraudulently attesting that the defendants actually signed the documents, which was untrue and in violation of State law,” the advisory explains. “The defendants then allegedly directed the employees under their supervision to file the fraudulent documents with the Clark County Recorder’s office, to be used to start foreclosures on homes throughout the County.”
The forgeries were produced, the state explained, to enable the company to file documents with the county on the same day they were created.
The charges would seem to indicate that the Nevada Attorney General’s office is not interested in participating in a settlement package being worked out between other states and the nation’s largest banks, nearly all of which have engaged in similar robo-signing schemes.
Goldman Sachs, one of the largest banks in the world, faced undisclosed fines earlier this year for its own robo-signing scandal over about 135,000 foreclosures from 2008-2009, but instead of criminal charges, the Federal Reserve ordered Goldman to conduct an internal probe to find and compensate customers who were wrongfully foreclosed upon. They’ve since agreed to outright end the process of robo-signing foreclosure documents.
Nationally, U.S. officials have launched an independent review process in which individuals can challenge foreclosures carried out by 14 major lenders in the wake of the 2008 financial crisis.
Independent consultants would assess if borrowers lost out financially “through errors, misrepresentations or other deficiencies in foreclosure practices,” the Office of the Comptroller of the Currency said.
Where that is the case, the consultants would determine what compensation should be paid. The action covers foreclosures in 2009 and 2010 and requires lenders to send out letters to borrowers explaining how they can have their cases reviewed.
Authorities have also set up a website to help facilitate the process.
Read the indictment here (PDF).