Foreclosure fraud fighters are battling each other in court after a Palm Beach Gardens woman was accused of stealing someone else’s ideas and work to win an $18 million whistle-blower lawsuit against major lenders.
Ignacio Damian Figueroa, a Fort Lauderdale resident who runs Stopforeclosurefraud.com, says he did thousands of hours of research and gathered flawed documents for Lynn Szymoniak believing he would be included in the lender lawsuit.
He says Szymoniak, a 64-year-old attorney who exposed the practice of robo-signing on the CBS news show “60 Minutes” in 2011, got the idea for filing a so-called “qui tam” lawsuit from him during a happy-hour organized in West Palm Beach by anti-foreclosure activists.
A qui tam lawsuit is brought by a private citizen, or “relator”, under the federal False Claims Act against a company or person believed to have violated laws in contracts with the government. If won, the private citizen is entitled to a percentage of the recovery.
Szymoniak’s award was included in a $95 million settlement reached in 2012 among the U.S. Attorney for the District of South Carolina and Bank of America, JPMorgan Chase, Wells Fargo and Citigroup.
“Her entire idea came from my client,” said Figueroa’s Jacksonville-based attorney Donald St. Denis. “She had him doing research and work thinking he would be the relator.”
Szymoniak, who formed the West Palm Beach-based nonprofit Housing Justice Foundation with her whistle-blower winnings, denies Figueroa’s claims. She said she did agree to represent the 41-year-old in a class action lawsuit, but that he hired another firm.
“I did not represent him in any false claims act matter anywhere, ever, and there is no retainer agreement,” she said. “I can’t comment since we are still in litigation other than to say that I expect it will be dismissed.”
Claims of the lawsuit, filed in March in Broward County, include legal malpractice, breach of fiduciary duty, unjust enrichment and fraud.
Figueroa says he and Szymoniak met after he made a series of YouTube videos about flawed foreclosure documents in 2010. He wasn’t aware Szymoniak had filed the whistle-blower suit until the $18 million settlement became public last year, St. Denis said.
“He about threw up,” St. Denis said. “He really had a difficult time after that.”
The Justice Department, which prosecuted part of Szymoniak’s whistle-blower complaint and got the settlement, has since pulled out of the litigation. Szymoniak is pursuing a second part of the suit on her own.
Szymoniak said she has had many requests for money since winning the settlement.
“Sometimes when you do not agree to give money to people, the requests become ugly,” she said. “The worst so far was the angry man who wanted me to make a movie and when I refused wished that my keyboard would burst into flames and my eyes would fall out of my head.”
Szymoniak began her foreclosure investigations when she defaulted on her own loan after a dispute concerning her adjustable-rate mortgage. When a foreclosure was filed against her in 2008, the plaintiff wasn’t her bank, but a trustee for a mortgage-backed security that had no proof about how it acquired her mortgage.