Conspiracy of One? The Scapegoat

This is a good article on Salon by David Dayen about the scapegoating of a single DocX (LPS) employee who is claimed to be solely responsible for the perjury and document fabrication that exploded in the foreclosure crisis.  Uh huh.  That is one talented scammer.

Chris Koster, the attorney general of Missouri, indicted Brown, DocX and LPS for forgery. But Koster did not attempt to flip the smaller fry to get to the higher-ups, the standard strategy of most criminal prosecutors. Instead, LPS cut a deal with Missouri for a mere $2 million, and in exchange “cooperated” in the Brown investigation. This severed Brown from the parent company, which not only had to know what was happening at DocX, but used basically the same assembly-line mortgage document execution at its other facilities. In a September 2006 newsletter called “The Summit,” managers for LPS, then known as Fidelity National Foreclosure Solutions, openly touted the process that allowed them to “execute 1,000 documents per day.” Brown’s DocX wasn’t the only forgery and fabrication shop in the United States. This was industry practice.

Furthermore, evidence of the DocX forgery and fabrication process could be used to reach even higher. Who directly solicited the company for fake documents? The foreclosure mill law firms, which then knowingly submitted them into courts. Who directed the foreclosure mills to do that? The mortgage servicers, which are typically units of the biggest banks. Furthermore, there’s no reason to ever request the “entire collateral file” unless you have no other way to generate evidence to prove underlying ownership of the loan. This speaks to a faulty mortgage transfer process, improper securitizations, and generally fraudulent practices at the heart of Wall Street.

. . .

The state and federal charges against Brown claim that she committed a conspiracy to forge and fabricate mortgage documents. But apparently it was a conspiracy of one. Nobody else participated in this scheme, at least according to the statements of fact that the Justice Department put out. They assert that Brown cleverly concealed her company’s conduct from mortgage servicers, units of some of the largest banks.

That’s simply bunk.

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