The founder of a Florida-based mortgage servicing firm was sentenced to five years in prison Tuesday for her participation in a scheme to prepare and file more than 1 million fraudulently-signed and notarized documents.
Lorraine Brown, 56, launched the company DocX, which later became Jacksonville-based LPS Document Solutions.
In addition to her prison term, Brown, who no longer works for LPS, was sentenced to serve two years of supervised release and ordered to pay a fine of $15,000.
In November, Brown pleaded guilty to conspiracy to commit mail and wire fraud. She was accused of hiring cheap, temporary workers who were trained to mimic other people’s signatures so that mortgage paperwork could be processed faster, according to the complaint filed in U.S. District Court in Jacksonville.
The firm generated about $60 million in gross revenue between 2003 and 2009 as the real estate bubble burst and banks pushed to repossess homes.
“Lorraine Brown will spend five years in prison for her central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation’s housing market was at its most vulnerable point in generations,” said Acting Assistant Attorney General Mythili Raman of the U.S. Department of Justice’s criminal division.
While banks did issue special corporate resolutions delegating signing authority to specific, specially trained DocX employees, the complaint said other employees were also signing the names of the authorized signers.
“To assist in the scheme, samples of the actual authorized signers’ signatures were taped to the signing tables,” the complaint said.
In January, Florida Attorney General Pam Bondi announced a settlement was reached with LPS and its subsidiaries for more than $120 million. The settlement included 45 other attorneys general, and was negotiated after an investigation led by Bondi’s office.
Florida’s share of the settlement is approximately $8.6 million.