Courts Struggling to Put ‘Robo-Signers’ Behind Bars – Judge Rejects Most Recent Case, Citing Prosecution Misconduct

State Attorneys General have forced five giant mortgage firms to shell out $25 billion to settle claims of “robo-signing” and other foreclosure abuses — but putting anyone in jail has proven to be a much more difficult proposition.

In one of only two robo-signing prosecutions nationwide, a judge last week threw out the entire case, including more than 100 felony counts each against Gary Trafford and Geraldine Sheppard of Orange County.

The Californians had worked as title officers for Lender Processing Services, a giant firm that helps banks and mortgage servicers generate legal documents.
A mortgage task force assembled by Nevada Atty. Gen. Catherine Cortez Masto had accused Trafford and Sheppard of directing the fraudulent notarization and filing of notices of default, the paperwork used to start foreclosures, on delinquent Las Vegas-area borrowers.

But Clark County District Court Judge Carolyn Ellsworth ruled last week that prosecutors committed misconduct in their presentations to the grand jury that indicted Trafford and Sheppard in November 2011. The missteps included providing “irrelevant and highly inflammatory evidence” about how the evictions affected the homeowners, the judge said.

The dismissal stands in contrast to the outcome of the second robo-signing prosecution. In that case, Lorraine Brown, founder of DocX, a former Lender Processing Services subsidiary, pleaded guilty to a federal conspiracy charge in Jacksonville and to Missouri state charges of forgery and falsifying documents.

Brown faces a federal sentence of up to five years in prison and a Missouri sentence of at least two years, a spokeswoman for the Missouri attorney general said.

The sentences, to be imposed next month, would run concurrently.