Daily Business Review
By: Julie Kay
Florida Attorney General Bill McCollum has launched investigations into
three South Florida foreclosure law firms, and issued them all subpoenas
seeking detailed financial, client and employee records.
McCollum’s announcement Tuesday comes on the heels of an investigation
launched in May into Tampa-based Florida Default Law Group.
McCollum’s economic crimes division is investigating the Law Offices of
David J. Stern of Plantation, the Law Offices of Marshall C. Watson of
Fort Lauderdale and Shapiro & Fishman of Boca Raton and Tampa for
possible unfair and deceptive actions in handling foreclosure cases.
Investigators want to know whether bogus documentation was created and
filed with Florida courts to speed up foreclosures, potentially without
the knowledge or consent of homeowners.
“On numerous occasions, allegedly fabricated documents have been
presented to the courts in foreclosure actions to obtain final judgments
against homeowners,” McCollum’s office said in a news release.
“Thousands of final judgments of foreclosure against Florida homeowners
may have been the result of the allegedly improper actions of the law
firms under investigation.”
Information sought through the subpoenas is due Aug. 25.
The investigations were welcomed by foreclosure defense lawyers, who
have been filing civil lawsuits against the foreclosure law firms. The
critics, who dub them as “mills,” claim the firms are rushing through
large volumes of foreclosures on behalf of lenders, often improperly
serving notice on homeowners and in some cases fabricating documents.
As the economy has faltered, hundreds of thousands of homes have been
foreclosed upon in the last two years with Florida absorbing the title
of ground zero for the foreclosure meltdown. A growing chorus of lawyers
and consumer groups around the country has been urging judges to put
the brakes on foreclosures and examine documents more closely.
Late last month, Fort Lauderdale solo practitioner Kenneth Trent filed a
proposed federal class action against Stern alleging his firm filed
fraudulent court pleadings and concealed lenders’ lack of standing to
foreclose on properties. The firm denied the allegations.
The Florida Bar has acknowledged it is investigating complaints filed by homeowners about the Stern firm.
McCollum’s office is also looking into companies both Stern’s firm and
the Florida Default Law group may own outside the United States, said
office spokeswoman Shannon Knowles.
The AG wants to know if “the law firms have created affiliated companies
outside the United States where the allegedly false documents are being
prepared and then submitted to the law firms for use,” according to the
“I think this is outstanding,” Trent said. “It shows the tide is really
turning against these foreclosure mills and the massive fraud that has
been perpetrated against innocent Americans over the last five years or
even last decade.”
Trent said an assistant attorney general requested a copy of his complaint last week.
But Miami attorney Jeffrey Tew, who represents Stern, insisted the firm
has committed no wrongdoing and said most of the foreclosures are run
through government-backed lenders Fannie Mae and Freddie Mac and
ultimately approved by judges.
“There are three levels of government supervision,” Tew of Tew Cardenas
said. “I don’t know why the attorney general thinks he should spend his
limited resources on this case. But we will cooperate with the subpoena
as best we can.”
The subpoenas seek information on the firms’ business interests,
employees, independent contractors, process servers, servicing companies
and notaries. The state also seeks information about companies that
drafted affidavits for the law firms, lawyers who worked at the firms
over the last five years, lender clients, nondisclosure agreements with
employees, checks received from lenders, employee bonuses and payments
going back to 2008.
West Palm beach attorney Gerald Richman, who represents Shapiro &
Fishman, acknowledged “inadvertent mistakes” may have been made by the
law firm due to the large volume of foreclosures processed.
“There is no evidence of impropriety,” he said.
“As far as we know there is no basis to believe that Shapiro &
Fishman has done anything other than properly represent its clients
despite the allegations in blogs by a lot of defense lawyers that make a
living out of delaying foreclosure proceedings,” said Richman of
Richman & Greer.
Shapiro & Fishman has a staff of 400 and has handled thousands of foreclosure cases for 20 years, according to its website.
The Law Offices of Marshall C. Watson did not return calls for comment
by deadline. Its website states the firm represents such clients as Bank
of America, Chase, Citi and most of the country’s largest mortgage
Richman and others questioned the timing of the investigation, alleging
it was politically motivated by McCollum, a Republican candidate for
“I think there may be some politics,” Richman said. “It’s a hell of a
coincidence that he does this now at election time to look like he’s
Foreclosure defense attorney Roy Oppenheim of Oppenheim Pilelsky in
Weston, while welcoming the investigation, also questioned McCollum’s
“Why didn’t he do this two years ago?” Oppenheim asked. “He knows the
allegations have been out there. He knows complaints have been made. I
think the timing is a little off. I’m thrilled he’s doing this, but I
would have preferred he do this one-and-a-half years ago. Many people
who didn’t have attorneys didn’t have the support of his office.”
Oppenheim also wishes McCollum would extend his investigation to lenders and mortgage holders for filing faulty foreclosures.
“He’s investigating the law firms, but he should be investigating the
banks,” Oppenheim said. “He should also be looking into banks
trespassing onto peoples’ properties. The law firms are the scapegoats. I
see them as pawns.”
Sandi Copes, also a McCollum spokeswoman, denied the investigations are politically motivated.
“We like to be thorough, and some investigations take longer than
others,” she said. “We certainly don’t want to take any actions before
we thoroughly review complaints. It’s disappointing that political
motivations would even be questioned here when we are talking about
April Charney, a nationally recognized foreclosure defense attorney with
Jacksonville Legal Aid, said the attorney general’s office was not
motivated by politics but has been hamstrung by lack of funding and
staff “and has done the best they could with the resources they have.”
Charney blamed lenders and judges for contributing to the foreclosure crisis.
“Judges have abdicated their responsibility and allowed anarchy to occur in their courts,” she said.
Charney said she was asked to meet with Assistant U.S. Attorney Mark
Devereaux in Jacksonville and an FBI agent several months ago regarding a
possible investigation into improprieties with lender processing
services in foreclosures.
Julie Kay can be reached at (305) 347-6685.