A Georgia woman who headed DocX pleaded guilty to one count of conspiracy to commit wire and mail fraud in a case that tied back to the robo-signing scandal and the mishandling of thousands of mortgage documents.
The case ended at least one part of the massive foreclosure document-handling crisis that surfaced in Florida in the wake of the housing crisis.
U.S. prosecutors said Lorraine Brown agreed to plead guilty in a scheme that involved the hiring of dozens of workers to sign and fraudulently notarize thousands of mortgage-related documents even though employees signing the forms were not authorized to do so.
Court records suggested that Brown was hired by mortgage servicers to handle loan documents. When servicers used Brown’s services, she allegedly promised the availability of authorized signers to handle and authorize documents for mailings and public filings.
Prosecutors claimed Brown reneged on those promises and began allowing in 2005 the forging and falsification of signatures on official documents tied to mortgages and foreclosure filings.
A court filing by prosecutors said, “Unbeknownst to DocX clients, the authorized signers were instructed by Brown and other DocX employees to allow other, unauthorized DocX employees to sign, and to have the documents notarized as if the actual authorized signers had executed the documents.”
Brown pleaded guilty to one federal charge of conspiracy to commit wire and mail fraud in the U.S. District Court fot the Middle District in Florida. The offense comes with a possible 5-year prison sentence and up to $250,000 in fines.
Brown is a Georgia resident who founded DocX in the 1990s in Ohio, court records said. The firm was eventually acquired by Fidelity National Financial. Brown, at all times, remained the leader of the DocX subsidiary, even as the firm eventually fell under the leadership of Fidelity National Information Services (FNIS) and later became a division of Lender Processing Services (LPS). That development occurred when FNIS spun off a series of its business lines into LPS, prompting DocX to operate as LPS Document Services. It was alleged that Brown conspired to keep LPS in the dark about her activities.
LPS noted in its own statement about the charges against Brown that it was unaware of the alleged activities.