Foreclosure Fraud – New Lawyers Face Probes, Pop Up at Other Firms

By Christine Stapleton and Kimberly Miller
Palm Beach Post Staff Writer

Recently out of law school and looking for work, scores of young Florida attorneys found steady paychecks in burgeoning firms whose business is based on repossessing the American dream.

Today, more than 260 attorneys work at four of Florida’s largest foreclosure firms, and 48 percent of them have been practicing law for less than three years, according to Florida Bar records obtained by The Palm Beach Post.

Of 156 attorneys who started the year churning out foreclosures at the massive Plantation-based operation of David J. Stern but have since left or been laid off, half had been practicing law for less than four years.

With this fall’s allegations of forged foreclosure documents, fraudulent notarizations and questionable affidavits submitted in tens of thousands of foreclosure cases, those nascent lawyers are now under a cloud of suspicion.

Some may face Florida Bar investigations that could end their careers, while homeowner advocates wonder whether the foreclosure crisis would have reached its state of disorder if it weren’t for legions of novice lawyers doing the legwork.

And as the state’s overwhelmed court system sorts through the foreclosure chaos, many of the attorneys who worked for the now deposed Stern law firm have been hired at other large companies doing foreclosure work.

‘A game of Whac-A-Mole’

The Atlanta-based McCalla Raymer law firm, which handles foreclosures for mortgage giant Fannie Mae in Georgia, hopes to do the same in Florida. In November, as the firm began setting up shop in Orlando with 10 former Stern attorneys, disgruntled homeowners in Georgia filed a federal class-action lawsuit against the firm, claiming it used forged documents to take their homes, often while they were in the midst of modifying their loans. This month four other Georgia homeowners – who are representing themselves – have filed similar lawsuits against McCalla Raymer.

The firm initially registered to do business in Florida as McCalla Raymer Florida LLC but dissolved that firm a month later and is now registered to do business in Florida as Stone, McGehee & Silver. The firm, which hired former Fannie Mae associate general counsel and foreclosure expert Susan Reid last month, has plans to expand throughout Florida, advertising for attorneys in Tampa, Fort Lauderdale, Miami and Orlando. While at Fannie Mae, Reid worked with foreclosure attorneys in its retained attorney network, including those from Stern’s office.

The Fort Lauderdale-based Law Offices of Marshall C. Watson has picked up five former Stern attorneys, while Shapiro & Fishman, with offices in Tampa and Boca Raton, has hired one. Both firms, as well as Stern’s company and the Tampa-based Florida Default Law Group, are under state investigation.

Other lawyers who have left Stern’s company are now earning a living at several Fannie Mae-designated foreclosure firms, such as Ben-Ezra & Katz in Fort Lauderdale and Kahane & Associates in Plantation.

“We did a thorough vetting of the Stern attorneys,” said Marty Stone, a managing partner with McCalla Raymer. “I don’t want to say we weren’t concerned at all, but I do think there is a danger of painting with too broad of a brush.”

Still, the distribution of former Stern attorneys to other firms feels like an injustice to some home­owners in foreclosure.

In sworn statements taken by the state attorney general’s office, two former Stern employees – a paralegal and a legal assistant – attest to wrongdoing at the firm that included hiding problem files from federal auditors, forging signatures and making up documents as staff struggled to keep up with a mounting volume of foreclosures.

“It’s like a game of Whac-A-Mole – these unethical, dangerous attorneys just pop up somewhere else,” said Lisa Epstein, a home­owner advocate in Palm Beach County who runs the website Foreclosure Hamlet. “The Florida Bar has proven that they have no intention of disciplining these unprofessional attorneys.”

Lack of experience could have led young lawyers to follow their employer’s lead, unaware they may be committing an offense, said Matt Weidner, an outspoken St. Petersburg foreclosure defense attorney, who nonetheless believes lawyers share a large portion of blame in the foreclosure fracas.

“The attorneys are the key; they played an essential, critical role in all of this,” Weidner said. “But I know the younger attorneys had no idea what they were doing.”

Be sure to check out the rest here…

And don’t forget to leave a comment on the original article here…


8 Responses to “Foreclosure Fraud – New Lawyers Face Probes, Pop Up at Other Firms”
  1. pparke500 says:

    Here’s another defense: “I was just following orders.” We know how well that worked at the Nuremberg trials. It should not work defending an ethics complaint in front of the Florida bar but everything I’ve seen and read about the bar and the practitioners here, including the judges, tell me that it will work. I am so not impressed with the level of legal work in this state. Looking forward to leaving here soon. Just as soon as the foreclosure mill that took over Stern’s cases is finished creating fraudulent documents in my case that the judge won’t care about. Rocket docket still alive and well.

  2. Stupendous Man - Defender of Liberty - Foe of Tyranny says:

    I’m expecting to see some “I didn’t do it on purpose,” and also some “I didn’t know what I was doing” kind of defenses to any BAR disciplinary complaints/actions. While those things may be true I’m disinclined to believe they matter.

    I’m reminded of an old Greek aphorism: “Though the boys throw rocks in jest the frogs still die in earnest.”

    Tragic for these young, ignorant low level players in these frauds. Tragic. But their actions should be weighed not on their ignorance but on the impact their actions had on others. Fraudulently dispossessing someone of their home, and ALL the stability that represents, has a negative impact that can hardly be over stated.

  3. Mike says:

    The following is a link to an article in a law magazine-it is written from a very matter-of-fact viewpoint regarding the foreclosure crisis. Because it is so “subjective” and “matter-of-fact,” some of the statements were roll-on-the-floor funny. (To me!)

    Quoting from article,

    “An attorney for another prominent South Florida law firm who did not want to be identified also expressed an unwillingness to participate. “One, it’s always a mess taking over someone else’s case,” he said. “Two, you have the big issue of who owns the mortgages. It’s a big mess. “‘


    And I can’t wait to hear how this Fannie and Freddie deal works out for Ed Pozzuoli. Per article:

    “But one well-respected law firm, Fort-Lauderdale-based Tripp Scott, was one of the nine that signed up with Fannie and Freddie. The firm, which already had been doing “high-end” banking work, was approached by the mortgage companies. Firm managing partner Ed Pozzuoli said he wasn’t told how many cases he is getting, but his firm has been promised it will get primarily the complex, contested cases that pay higher fees. He said he’s confident he can make the economics work without hiring low-paid associates.”We don’t pay our associates $60,000,” he said. “Any case has its risks. But we think it’s a good opportunity, and we will not diminish the quality of our work at all.”


    (Ummm….note to Mr. Pozzuoli: By “complex case,” Fannie and Freddie mean, “we don’t know who the hell owns this sucker“ and by “contested case, “ Fannie and Freddie mean, “the homeowner knows we don‘t know who the hell owns this sucker.“) So good luck with your firm’s new caseload, Ed!


    The article goes on to say that,

     “He {Mr. Pozzuoli} said he’s confident he can make the economics work without hiring low-paid associates.”


    I don’t know, Ed. A lot of your more highly-paid associates might have a problem with that whole “committing perjury/fraud before the court” thing. You might want to go scoop up some of those wet-behind-the-ear $60,000 a year associates who aren’t smart enough to figure out that you’re asking themselves to perjure themselves.

    (Note to all of you recently-unemployed David J. Stern associate attorneys and all of you over-worked and low-paid McCalla Raymer associate attorneys–Ed Pozzuoli is paying more for the same work!) Let the hiring frenzy begin!

  4. MEG says:

    Reminds me of the saying by Mark Twain:

    “If you pick up a starving dog and make him properous, he will not bite you.”

    From what I read about “The Law Offices of David Stern” and “Shapiro & Fishman” etc…. it would be a safe assumption to say many of these “Novice Attorneys, Paralegal’s, Legal Assistant’s, Chamber Maids, Sandwhich Makers etc… were the starving dogs.

    Now that they have stopped feeding them, it should be interesting to see how this all unfolds.

  5. Bill P. says:

    They didn’t know what they were doing? Gimme a break! When I became a police officer, it was “game on” from the very first day. If I went out on the street and shot several people using bad judgment, do you think the response would be – “well……. he’s new. He just didn’t know what he was doing. Let him transfer to another department to get more experience.” Bullshit!

  6. Diana Cessna says:

    What is even more dangerous is that these inexperienced foreclosure mill attorneys are setting up shop as consumer attorneys. With the heat on the mills, some have seen easier money lining homeowners up for BK filings and modification counseling when, of course, they have no skill or experience to determine whether these options are good for the individuals. They flock to where they can charge the most fees and attract the most desperate homeowners. People are eager to open their checkbooks and pay an Attorney that tells them what they want to here. Unfortunately, the results oftentimes put them in a worse position when they started. Then, they can send them back to their buddies still at the FC Mills.

  7. Jeff Jackson says:

    Samuel I White in Maryland.

  8. Michael says:

    Susan was working for Fannie Mae, overseeing Florida law firms (including Stern), then left and was immediately able to come here and join a mill with expansion plans into Florida? The revolving door at its worst.

    Sounds like Susan wants a big house, like the mill lawyers she was overseeing. Hopefully, as we learn more about her and her work at Fannie, we’ll find info to land her in an even bigger house than she’s ever dreamed of. It’d be the lap of luxury; all meals are provided (though apparently the food isn’t very good), they even give you clothes (limited selection; same style and color), and her new house-mates can teach her a more honest occupation when she gets to leave (or maybe the FL Bar will readmit her after a multi-year stint, like it did another high-volume FL HOA lawyer).

Leave a Reply