The pile-on for Lorraine Brown continues. When we last left this story, Brown, the former President of fraudulent document processor DocX, pleaded guilty in federal court to one count of wire and mail fraud, and agreed to face a sentence of up to five years in prison. The state of Missouri also reached a plea agreement with Brown on document forgery and perjury charges, which carry a 2-3 year sentence that will probably get served concurrently.
Now, Michigan Attorney General Bill Schuette, a Republican, has filed criminal charges against Lorraine Brown, charges that include racketeering. Schuette responded to pressure from registers of deeds in the state, which identified false and forged mortgage documentation filed with their offices.
In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged. A “60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting. County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.
As part of his investigation, Schuette reviewed documents filed in Michigan and prepared by DocX, a document processing company located in Georgia. DocX processed mortgage assignments and lien releases for residential lenders and servicers nationwide. Schuette’s investigation revealed that former DocX president Lorraine Brown, 51, of Alpharetta, Georgia, allegedly established and orchestrated a widespread scheme of “robo-signing,” a practice in which employees were directed to fraudulently sign another authorized person’s name on mortgage documents in order to execute these documents as quickly as possible.
Internally, DocX identified this practice as “facsimile signing” or “surrogate signing.” Schuette alleges that from 2006 through 2009, these improperly executed documents were created and recorded at Brown’s direction. Schuette’s investigation revealed that more than 1,000 unauthorized and improperly executed documents were filed with county registers of deeds throughout Michigan.
This is a more serious felony charge than what has been handed down to Brown. Conducting criminal enterprises, or racketeering, carries a 20-year prison sentence in the state of Michigan. Schuette filed the suit in Kent County, and said in a release that “arrangements are being made for Brown to surrender to Michigan authorities.”
Like the other cases, this charge (which is not a plea deal, at least not yet) concern Brown individually and not her company, which went out of business in 2010, or the parent company LPS, to which DocX was a subsidiary. So you have a woman charged with “conducting a criminal enterprise” with no other co-conspirators, an unusual situation to say the least.
This is the dichotomy at the heart of the Brown charges. On one level, it’s satisfying to see the practices of DocX rightly denoted as criminal violations and fraud, and to see someone face sanction for that. On another level, there’s an essential incompleteness to the charges, which implicate nobody but Brown, including the banks who sought out the fraudulent documents out of need, after mangling the mortgage transfers in the securitization process.