Former employees of controversial Florida law firm David J. Stern PA (NASDAQ: DJSP) testified under oath the several several improprieties they have witnessed in relation to the company’s mortgage and foreclosures operations.
According to a report by the Sun Sentinel, the former workers said they were pressured into bending foreclosure rules as the law firm placed a premium in speed over accuracy when it comes to handling mortgage documents. The depositions of the former workers depicted a paperwork process that gave little regard to accuracy in handling vital documents.
One ex-employee, former legal assistant Kelly Scott, described how workers would change the codes on improperly prepared Fannie Mae and Freddie Mac loan documents just to escape detection by auditors. Scott also admitted hearing Stern himself giving out instructions to the staff demanding fast processing on Fannie Mae and Freddie Mac cases. “Those were considered his babies,” Scott is quoted as saying in her deposition.
Following Scott’s testimony, Fannie Mae and Freddie Mac announced they were suspending new foreclosure referrals to David J. Stern PA.
The three ex-Stern employees also described how favored employees were lavished with cars, cell phones and vacations. Stern’s girlfriend was also a recipient of these gifts, the former workers said in their depositions which were taken by the Florida Attorney General’s Office over the past month. Scott said, “There were perks that certain employees received from David Stern … if they were either dating him or good friends.”
Scott and the other ex-employees described how on a typical day paralegals would bring in 250 to 500 documents in a conference room to be signed by Cheryl Samons, Stern’s foreclosure department manager. If Samons became exhausted, one of three other authorized employees would sign in her behalf. Scott said Samons was gifted with a new BMW SUV by Stern and that she typically got a new car every year. Samons and another employee would also join Stern in his vacations. He paid her Samons’ mortgage and her cell phone bill, Scott said.
Two other former workers also testified on how they were ordered to change the dates or backdtate foreclosure files and even switch signed pages of unrelated files, the Sentinel reported. The ex-employees claim that Stern and the top level managers were aware of the improprieties yet they were ordered to continue falsifying or speeding up the paperwork. In cases, they were also threatened with losing their jobs if they did not.
Meanwhile, Stern is quoted in the New York Times as saying, ” … there has not been submission of fraudulent documents… We have done nothing wrong.”
In a phone interview with CNN, Stern’s attorney Jeffrey Tew said, “I can tell you now that no misconduct is occurring at David Stern’s law firm, and the firm Previewworks very diligently to make sure that all the processing is done correctly.“
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