It is one of the few criminal prosecutions of a top mortgage executive stemming from the recent housing crisis: Lorraine Brown, former chief executive of Lender Processing Services Inc.'s (LPS) DocX unit before it was shuttered in 2010, was sentenced on Tuesday to five years in prison for her role in a scheme to prepare and file more than one million fraudulently signed and notarized mortgage documents.
In addition, Brown, who pleaded guilty last November to conspiracy to commit mail and wire fraud, must pay a fine of $15,000 and serve two years of supervised release. The terms are the result of a plea agreement, according to the Department of Justice.
Prosecutors accused Brown of engaging in fraudulent mortgage-signing practices, including robo-signing, in an effort to boost DocX's profits. They alleged that from 2003 to 2009, Brown engaged in a scheme that included having temporary workers robo-sign thousands of mortgage documents a day.
At the time, DocX was handling more than half of the nation's foreclosures. The company's main clients included residential mortgage servicers.
Acting Assistant Attorney General Mythili Raman said Brown, 56, of Alpharetta, Ga., played a ‘central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation's housing market was at its most vulnerable point in generations.’
Brown's sentencing comes four months after LPS agreed to pay $35 million and enter a two-year non-prosecution agreement to resolve a related federal criminal probe. It also comes seven months after Brown reached an agreement with Missouri state prosecutors to plead guilty to one felony count each of forgery and perjury, as well as a misdemeanor charge of making a false declaration.
Last month, it was announced that Fidelity National Financial Inc. would be buying LPS for about $2.9 billion in cash and stock. The deal is expected to close in the fourth quarter.
This FBI investigation was part of the Financial Fraud Enforcement Task Force's (FFETF) overall effort to investigate and prosecute financial crimes. Founded in 2009 by President Obama, the FFETF is a consortium of federal law enforcement agencies and officials working in coordinated fashion to combat fraud.
Over the past three years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.