Reuters reports that David J. Stern has been sued for fraud by DJSP Enterprises Inc., a Plantation, Fla.-based, publicly traded company that Stern helped to launch to handle the back-office operations of his law firm, which closed in March 2011 amid charges of improper handling of foreclosure cases. DJSP accuses Stern of concealing inflated revenue by ‘cutting corners’ while awarding ‘extravagant gifts’ and hefty bonuses to employees that quickly churned out foreclosures.
The company also adds that Stern's law firm ‘directly and necessarily resulted in the destruction of DJSP's business.’ DJSP also filed a lawsuit against the auditors Grant Thornton LLP and McGladrey & Pullen LLP for not properly vetting the transactions in question.
Jeffrey Tew, the attorney representing Stern, told Reuters that his client disputed the charges. ‘David denies all of the allegations in this lawsuit, and we're going to defend it,’ he says.