Foreclosure mills in the clear; Florida closes cases with no findings
6:30 pm Friday, Oct. 5, 2012
By Kimberly Miller
Palm Beach Post Staff Writer
Florida’s attorney general PAM BONDI has closed a high-profile investigation into alleged wrongdoing by the state’s largest foreclosure law firms with no findings.
The probes, opened by former attorney general Bill McCollum in 2010, ended not with the swiftness of a gavel falling, but in a slow fizzle of court judgments, law firm implosions and the firing of two top state investigators by Attorney General Pam Bondi.
A February Florida Supreme Court decision that upheld a ban on the state from investigating the firms under the Florida Deceptive and Unfair Trade Practices Act was the real decider, attorney general communications director Jennifer Meale said Friday.
“Accordingly, we have closed our law firm investigations and anticipate that any enforcement action will be up to the discretion of the Florida Bar,” Meale said.
The Florida Bar has maintained it only has the power to investigate individual attorneys. As of mid-August, 149 cases of attorney-related foreclosure fraud had been investigated by the Florida Bar with no disciplinary actions taken. There were 171 cases pending at that time.
Accusations against the seven law firms, which represent lenders in foreclosure cases, included taking illegal shortcuts to hasten home repossessions and filing fraudulent documents in court.
Attorney Gerald Richman, who represents the Boca Raton-based firm of Shapiro & Fishman, said having the cases closed vindicates his position that the state has no jurisdiction to investigate and that his client did nothing wrong.
“There was never any scheme or plot to injure anyone,” Richman said Friday. “They operated as lawyers and given the tremendous volume of cases they had to handle, they did an excellent job.”
Homeowners and foreclosure defense attorneys who battled the so-called “foreclosure mills” in court said they were frustrated by how the cases were handled.
Royal Palm Beach-based defense attorney Tom Ice said he was disappointed that “politics should trump the rule of law.”
“Having said that, they might as well close the cases, they weren’t doing anything to go forward with the investigations anyway,” Ice said. “Bondi fired the lead investigators and otherwise ignored the fraud committed against Florida citizens.”
Former assistant attorneys general Theresa Edwards and June Clarkson were fired in May 2011. An inspector general’s inquiry upheld the firings, saying they were dismissed because of their “poor judgment and lack of independent investigation on high-profile foreclosure mill cases.”
But the duo were responsible for the only settlement reached in the foreclosure firm investigations: a $2 million agreement with the Fort Lauderdale-based law firm of Marshall C. Watson, which admitted no wrongdoing.
“We are not surprised in the least, but are very disappointed that Florida chooses to ignore these huge problems,” Clarkson said Friday about the end of the investigations.
Hundreds of thousands of Florida homeowners have faced foreclosure since the housing market crashed and the economy crumbled. Such law firms as Shapiro & Fishman, and the Law Offices of David J. Stern in Plantation, were hired by lenders to push through cases.
Stern’s Plantation-based firm once had 1,400 employees and handled 100,000 foreclosures statewide. It closed in 2011 after it was fired by its largest clients following the state’s allegations of wrongdoing.
Stern’s attorney, Jeff Tew, said Friday he was unaware the attorney general had closed the case, but hadn’t spoken to anyone in the office for months.
“It’s one of those things that shouldn’t have happened,” said Tew, who believes the investigations were opened to boost McCollum’s campaign for governor. “Unfortunately, it put 1,400 people out of work.”
Tew said Stern has about 50 Florida Bar complaints against him, 30 of which have been decided in Stern’s favor. The others are still under review, Tew said.
The Fort Lauderdale firm of Ben-Ezra & Katz also was let go by its major clients and shut down. The other firms included in the now-closed investigations were the Florida Default Law Group in Tampa, Jacksonville’s Albertelli Law, the Law Offices of Daniel Consuegra in Tampa and Kahane & Associates in Plantation.
Palm Beach County homeowner advocate Lisa Epstein, whose grassroots effort helped uncover the robo-signing issue, said she has little faith anyone will be held accountable for foreclosure malpractice.
“As we’ve all seen, foreclosure mills have nothing to fear from the Florida Bar,” she said. “In the end, government and law enforcement on all levels has implemented a policy to bail out the banks while the people, the rule of law, the authenticity of the nation’s property records, and the integrity of our judiciary go to hell.”
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Curious timing for an anti-Bondi story, and not helpful to Romney in Florida for the fall out it might create, but the reason for the fizzle of the cases laid at the feet of Bondi is not all that clear for me.