Bet on Foreclosure Boom Turns Sour for Investors
David J. Stern may be the best-known beneficiary of the foreclosure boom, having made millions in recent years from evictions processed by his law firm, the largest of its kind in Florida. But when he took part of his firm public early last year, he had plenty of help from a constellation of investors also looking to cash in on people losing their homes.
Early in 2010, the back-office processing operations of Mr. Stern’s law firm were converted into a publicly traded company called DJSP Enterprises. Mr. Stern pocketed nearly $60 million from that transaction, public filings show.
Behind that big-money deal was a curious cast of characters, including some with previous run-ins with regulators. Other parties included a small Wall Street investment bank headed by a former presidential candidate, the retired Gen. Wesley K. Clark, and a little-known private equity firm based in New York.
Even before the DJSP windfall, Mr. Stern enjoyed a lifestyle that featured grand mansions, flashy sports cars and a yacht called Misunderstood. But the days of easy money are over for Mr. Stern, his law firm and DJSP investors.
As the Florida attorney general’s office continues to investigate whether Mr. Stern’s law firm falsified documents in order to speed up foreclosures, the firm has lost its biggest clients, including Citibank and Fannie Mae. Many of DJSP’s executives have left the company, and it has laid off about 80 percent of its 1,200 employees.
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I never trusted Wesley Clark. However, it looks like he may be JUST ANOTHER POLITICIAN that’s going to be protected from this mess, along with all the dishonest MERS employees, bank robo-signers, etc.
How long does it take for a prosecutor to spot a fraudulent document? Not very long at all, and it should take no time if it was signed by someone who has already testified that they signed affidavits without reviewing them. It’s kind of hard to not commit perjury by swearing that an affidavit is true if you don’t read it, isn’t it?
How long does it take a prosecutor to prosecute a bankster or one of their minions for fraud? It depends on the cash that can be obtained in the shake down. Of course, prosecutors who are already on the payroll haven’t dared to break their deals by investigating anything.
Still, if someone turns up the heat on all of the prosecutors who should be prosecuting Stern, I expect that they will take action although it probably will be extra-judicial. With all of the corrupt deals going on, I’m surprised that Stern hasn’t fallen over the stern yet. I bet that he is staying away from boats and planes, too.