RICO Suit Seeks Billions from David Stern and His Foreclosure-Mill Law Firm
Posted Jul 30, 2010 12:55 PM CST
By Martha Neil
A racketeering lawsuit seeking class action status and, potentially, up to billions of dollars in damages has been filed against a Florida lawyer and his foreclosure-mill law firm. Also named as a defendant is a bank-created company that, the complaint alleges, owned a criminal enterprise which operated to violate homeowners' legal rights by intentionally obscuring the true holders of mortgages under the guise of running a "registration" company that purportedly kept track of mortgage ownership.
Filed Monday in federal court in South Florida, the suit (PDF) contends that David Stern and his Plantation law firm violated the Racketeer Influenced and Corrupt Organizations Act by fraudulently pursuing tens of thousands of foreclosure actions on behalf of lenders who did not, in fact, hold the original notes and mortgages on the properties at issue as required by law, the Daily Business Review reports in an article reprinted in New York Lawyer (reg. req.).
Central to the process was an innovative company known as Mortgage Electronic Registration Service Corp., which purported both to be the mortgagee and to be "acting solely as a nominee for Lender and Lender's successors and assigns" in numerous form documents, the complaint contends. Such "intentionally ambiguous verbiage," it alleges, was part of a conspiracy involving Stern, his law firm and defendant Merscorp Inc. that used MERS "so that to the average consumer, or even legal professional ... who or what was or is ultimately receiving the benefits of any mortgage payments" cannot be determined.
"The employees of the defendant firm, including many licensed attorneys, have become skillful in using the artifice of MERS to sabotage the judicial process to the detriment of borrowers and, over the past several years, have routinely relied upon MERS to do just that," the suit alleges, contending that the defendants illegally obtained final foreclosure judgments by obscuring the truth about mortgage ownership concerning cases in which the purported plaintiff lenders "had no standing whatsoever."
However, defense lawyers say Stern, his firm and MERS have done nothing wrong:
Jeffrey Tew of Tew Cardenas in Miami is Stern's lawyer and says neither Stern nor Stern's firm is at fault. "We don’t think there is any merit to it,” he says of the complaint.
Attorney Robert Brochin of Morgan Lewis & Bockius represents MERS. He described the complaint as lacking in “any merit” but refused to comment further to the Daily Business Review.
The suit was filed by Kenneth Eric Trent, a sole practitioner in Fort Lauderdale. It seeks treble damages and attorney's fees and costs.
Related ABAJournal.com posts: