Ex-mortgage executive gets five years prison in robo-signing case

Tue Jun 25, 2013 5:19pm EDT

(Reuters) - A former Lender Processing Services Inc executive was sentenced on Tuesday to five years in prison for her role in a scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage documents, the U.S. Department of Justice said.

The defendant, Lorraine Brown of Alpharetta, Georgia, had been chief executive of LPS' DocX unit before the unit was closed in 2010. Her case is one of the rare criminal prosecutions of a top mortgage executive stemming from the recent housing crisis.

Prosecutors accused Brown of implementing fraudulent signing practices, including "robo-signing," to enable DocX, to boost volume and profit.

They said the scheme ran from 2003 to 2009, and included temporary workers who signed thousands of documents a day. DocX had once handled more than half of the nation's foreclosures, and its main clients included residential mortgage servicers.

The 56-year-old Brown, had pleaded guilty last November to conspiracy to commit mail and wire fraud in connection with the scheme.

U.S. District Judge Henry Lee Adams in Jacksonville, Florida, imposed the sentence, which was the maximum called for under Brown's plea agreement, and fined the defendant $15,000, the Justice Department said.

The sentence reflects Brown's "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," Acting Assistant Attorney General Mythili Raman said in a statement.

Mark Rosenblum, a lawyer for Brown, was not immediately available for comment.

Brown was sentenced four months after LPS agreed to pay $35 million and enter a two-year non-prosecution agreement to resolve a related federal criminal probe.

The sentence also came seven months after Brown reached an agreement with Missouri state prosecutors to plead guilty to one felony count each of forgery and perjury, and a misdemeanor count of making a false declaration.

A spokeswoman for Missouri's attorney general had no immediate comment on Tuesday.

LPS agreed last month to be bought by Fidelity National Financial Inc, known for its title insurance operations, for about $2.9 billion in cash and stock. The takeover was expected to close in the fourth quarter of 2013.

The case is U.S. v. Brown, U.S. District Court, Middle District of Florida, No. 12-cr-00198.

(Reporting by Jonathan Stempel in New York. Additional reporting by Anna Louie Sussman; Editing by Bob Burgdorfer)

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