The former president of DocX LLC pleaded guilty to a federal criminal charge in Florida and will plead guilty to three state charges in Missouri arising from the robo-signing of mortgage documents by her company.
Lorraine “Lori” Brown, 56, of Alpharetta, Georgia, pleaded guilty to one count of conspiracy to commit mail and wire fraud before a Jacksonville, Florida, federal judge today, according to U.S. prosecutors and her attorney, Mark Rosenblum.
“Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis,” Assistant Attorney General Lanny Breuer said in a statement.
“She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others,” Breuer said. “Appropriately, she now faces the prospect of prison time.”
Brown, who founded the company later acquired by Jacksonville-based Lender Processing Services Inc. (LPS:US), faces a maximum sentence of five years in prison, according to Breuer.
“Lori didn’t expect to be in this position, but now that she is she’s facing it with grace and dignity,” Rosenblum said in an e-mailed statement. His client had waived indictment and a criminal charging document was filed against her earlier today.
“Without doubt this is a difficult day for Lori, but it’s also a good day. By negotiating a settlement to her situation and entering her guilty plea, Lori has started the process of getting on with the rest of her life,” Rosenblum said.
Brown also agreed to plead guilty to felony charges of forgery and perjury and the misdemeanor making a false declaration in Missouri where a Columbia grand jury in February returned a 136-count indictment against her and DocX.
Lender Processing agreed to pay $2 million to resolve the charges against its unit in August.
“DocX’s robo-signing practices were the worst in the country,” Missouri Attorney General Chris Koster said today in a statement. “Surrogate-signing crosses the threshold into criminal activity. This agreement brings to justice the person most responsible for these activities and upholds the principle that when you sign your name to a legal document, it matters.”
Brown will serve a sentence of at least two and not more than three years in prison, he said.
Rosenblum said he didn’t have a Missouri plea entry date. “We are available at the court’s convenience,” he said. U.S. Magistrate Judge Monte C. Richardson in Jacksonville ordered Brown released on her own recognizance after she entered her guilty plea today.
Lender Processing was unaware of Brown’s actions, said Michelle Kersch, a company spokeswoman.
“Ms. Brown actively concealed from LPS the surrogate signing practices that she implemented at DocX,” Kersch said, citing Brown’s plea agreement. “When LPS discovered these practices in November 2009, it immediately discontinued the practices, terminated Ms. Brown and shut down the operations of DocX.”
The company “remediated” the documents in question and has cooperated with the criminal probes, she said.
The Florida case is U.S. v. Brown, 12cr198, U.S. District Court for the Middle District of Florida (Jacksonville). The Missouri cases are State v. DocX LLC, 12BA-CROO433, and State v. Brown, 12BA-CR00430, Boone County, Missouri, Circuit Court (Columbia).
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