Last year, we noted the fantastic report issued at of the Florida Attorney General’s office that detailed the rampant fraud in the foreclosure operations of major loan servicers and banks (Florida Attorney General Report on Fraudclosure). It was put together by June Clarkson and Theresa Edwards.

That was before the AG’s office was sold to the highest bidder. The new AG, Pam Bondi, “mysteriously” decided to fire the two lawyers.

Mystery solved:

“Last December, when she was still investigating foreclosure fraud as a top lawyer in the Florida attorney general’s office, June Clarkson gave a PowerPoint presentation to a legal association.

Her presentation amounted to an indictment of Lender Processing Services, or LPS, a company near the center of ongoing state investigations into claims that foreclosures have been rushed en masse through the legal machinery, without proper documentation. She flashed images of paperwork on a screen under the heading “forgeries,” asserting that LPS’ former subsidiary, Docx, had produced phony documents to justify unlawful foreclosures.

The legal association later sent Clarkson a thank-you note, calling her tutorial “invaluable.” Word of her presentation reached New York, where a state Supreme Court judge cited it in a harshly-worded ruling that a bank lacked the right to foreclose on a Brooklyn home.

But the Jacksonville-based LPS was furious, particularly about one slide in the presentation: an image of the children’s board game Candyland, a satirical reference to the mortgage securitization process. The following month, a lawyer for LPS sent a letter to Clarkson and Theresa Edwards — a colleague who co-authored the presentation — calling their PowerPoint display “irresponsible” and “inflammatory,” adding: “The legitimate question at this point is whether you are still capable of conducting this investigation.”

Upper management in the attorney general’s office, which also received a copy of the LPS complaint, ultimately answered that question in the negative. The incoming director of the division of economic crimes admonished the two assistant state attorneys general, they say. In May, Clarkson and Edwards resigned under threat of being fired, according to the attorney general’s office.”

Florida has some of the highest rates of foreclosure in the country, and is home to many of the companies accused of improper document handling, yet the state’s enforcement apparatus has treated many of these companies with striking lenience, according to former state prosecutors and lawyers who represent Florida homeowners.

Many cite the forced departure of Clarkson and Edwards as a vivid example of how mortgage companies and law firms successfully exploit connections to Florida’s attorney general to soften legal probes, insulating themselves against the consequences of alleged law-breaking.

Of course, we know those denials are nonsense, and these investigators were tossed because they were actually doing their jobs, rather than looking the other way. AG Bondi has been criticized by Florida lawyers for accepting campaign contributions from companies the AG’s office is investigating.

Conflict of interest, anyone?

Thus: Congress has been bought and paid for, the Florida AG’s office is also up for sale. Is everyone in public office merely a whore selling their services to the highest bidder? The level of corruption is beyond comprehension — it is unconscionable.

If I lived in Florida, I would begin a recall immediately to get this pathetic trollop thrown out of office and then I would spend the next 10 years lobbying for her eventual disbarment.

My disgust is hard to put into words.

>

See also:
Florida Asst AG Andrew Spark Scathing Memo

Assistant attorney general resigns after memo blasting Florida AG’s office

Source:
Florida AG Pam Bondi Pressured By Targets Of Investigations To Soften Approach, Critics Say
William Alden
HuffPo October 12, 2011
http://www.huffingtonpost.com/2011/10/12/florida-attorney-general-pam-bondi-investigation_n_996541.html

Category: Foreclosures, Legal, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

50 Responses to “Florida AG Takes Orders, Money from Fraudclosure Firm”

  1. illyia says:

    BR

    “My disgust is hard to put into words.”
    This is so painful, at this point it is practically physical.
    Thanks for your honest coverage and insightful analysis, always.

    i.

  2. chris says:

    Barry, You sure burn the midnight oil. It is good to see you have this drive and motivation to push for information.Make sure you get your rest since its your turn to hang in the park with the protesters.

  3. tyaresun says:

    We know exactly who to blame if the populace eventually turns violent. All nonviolent avenues for recourse are being blocked.

  4. theexpertisin says:

    Unfortunately, if we recall all of the trollups, few would be left. Likely, the ones that replace the trollups would be just as corrupted by power/money/unlimited self-esteem as those were removed.

    Maybe the Ten Commandments needs to be reintroduced at every level of educatioon. Something needs to be done to educate the educated in ethics.

  5. mpetrosian says:

    Fu%k yeah. Mr.Ritholz you are the man.

  6. MikeNYC says:

    Sign me up for Occupy South Beach.

  7. Expat says:

    Barry, Barry, Barry. It’s just a few bad apples. Surely not more than a handful of Congressmen are corrupt. And one state AG out of fifty is nothing. C’mon, it’s just like Wall Street. There are a couple of Rogue Traders who spoil the reputation of whole productive, useful, moral, and fairly paid group of working Joe’s.

  8. philipat says:

    She was just on Faux Noise recently. They love her because she is leading the charge against the constitutionality of Obamacare. The US system is truly broken, “We the people” has become a very sick joke.

  9. BusSchDean says:

    Ethics would help but people love THEIR interpretation. People want to be ethical but more than that they want the group to be ethical and that takes leadership. Anyone see any moral leaders out there?

    Of course, as BR has mentioned many times, simply enforcing the law consistently and aggressively would help.

  10. mathman says:

    Oh, it’s downright awful:

    http://foodfreedom.wordpress.com/2011/10/11/%E2%80%98no-food-rights%E2%80%99-judge-quits-to-work-for-monsanto-law-firm/

    This is just a crumb from the mountain of corruption which runs rampant in America, and people wonder what the OWsers are complaining about – there are too many issues to make a succinct list of demands (we need a complete re-make of the entire system).

  11. rktbrkr says:

    Walkaways up to 27% and I assume strategic defaults are even higher in FL and the other sand states, condo prices were down 13% in Vegas area the past 12 mos. it’s simply not rational to continue paying a mortgage when your equity is pfft and you need a 30%+ price recovery just to break even.

    http://www.bloomberg.com/news/2011-10-03/strategic-mortgage-delinquencies-as-high-as-27-jpmorgan-says.html?source=patrick.net

  12. Petey Wheatstraw says:

    “AG Bondi has been criticized by Florida lawyers for accepting campaign contributions from companies the AG’s office is investigating.”

    Where is the Bar Association? Aren’t they tasked with keeping the system clean and trustworthy? Is there not one Florida judge (also and foremost a Bar Association member of the highest rank), that will step in and stop this criminality?

    It’s everywhere, BR, not just in FL.

    Should it take a decade to get an attorney disbarred? Should Scalia have gone duck hunting with Cheney while hearing a case in which the latter was party? Why are courts allowed to suppress the publication of opinions that are counter to precedent? Why are there no records of court proceedings (cameras/recorders in our courtrooms)? Why are magistrates allowed to hold meetings “in judge’s chambers,” where god only knows what kind of chicanery goes on? Should the appearance of impartiality be enough to have a judge recuse themselves, and if so, why is recusal from hearing a case left up to the same judge that will hear the case? Why are court records sealed, or allowed to be sealed by consent of the parties (usually as a condition of settlement)?

    Of all branches of government, the courts — of which all attorneys permitted to practice are officers, on being accepted into the relevant Bar Association (and who are, forever after, reliant on the “pleasure” of the court and maintenance of their Association membership, to sustain their livelihood) — are the most occult and corrupt. Prosecutorial misconduct is SOP, and as such, seldom, if ever, results in consequences for the corrupt “officer of the Court.”

    Our court system isn’t a branch of government, it’s a for-profit industry. The office of State/District Attorney is nothing more than a stepping stone to launching a political career (Ken Cuccinelli being the most recent example here in VA).

    The corruption is advanced and sustained, politically, by the simple fact that each case a court hears has a winner and a loser, resulting one citizen/party thinking the court did a good job (or got lucky), and another swearing that they got railroaded. Direct oversight by the electorate/governed would do much to force accountability on the system.

    As with all of the problems in all branches of government, the courts — through the monopoly that are the Bar Associations — will continue to defy accountability for their corruption simply because we allow them to. They are beholden to no one because there is no means for the citizenry to hold their feet to any fire.

    No organization should ever be allowed to be self-policing. At the very least, the all-powerful position of Judge or Magistrate should be term limited.

  13. rd says:

    Money and hedonism are the only things that count today. Our history is rhyming with the Roaring ’20s.

    Income inequality – check
    Institutionalized law-breaking – check
    Unregulated financial markets gone wild – check
    Fractured national and internaitional politics – check
    Pending international trade and currency wars – check
    Sovereign debt crises in the developed world – check

    As we come out of this rhyming sequence, I hope that we only end up rhyming with the ’30s and not the ’40s.

  14. Global Eyes says:

    We are not separated by states; we are connected by them. Kudos to BR for knocking the Florida AG who adversely impacts his Manhattan business and the world we live in.

  15. BusSchDean says:

    Petey…don’t forget the two judges in PA that sentenced children to privately run youth prisons from which the judges received kickbacks. Nothing like throwing children under the bus for personal profit.

    Self-regulation gets argued every generation yet take any “_____ (fill in the blank) Association” and see just how poorly that works. Their explicit agenda is to advance the profession or industry, any notion of actually policing necessarily takes a back seat…or, more accurately, the issue goes to committee.

  16. ilsm says:

    In the US’ multi trillion dollar militarist boondoggles:

    Enemies “foreign and domestic” are created
    Places to fight are made up, how to fight is based on profit
    Immense weapons systems are dreamed up for the private arsenal system
    The gold plated equipment are badly defined, then sold as the best thing since sliced bread
    Engineers do not test the sloppy designs
    Failed, poorly funded (watchdogs are bad) tests are ignored, a test not performed is a “pass”
    Brilliant officers who run the above system, retire and get hired in their sellers’ companies
    Objectors are fired for doing their job
    Congress’ laws protect “whistleblowers” while the enforcers work for the criminals

    At DeLong’s there is a sidebar about how this went in the Byzantine Empire in the 6th century.

    #OWS

  17. normal1 says:

    It’s stories like this that make me want to throw my hands up and say, “F*ck it.” Then, to relieve the despair, I have to jump over to look at some g.d. lolcat image. Once my brain is numb, then it’s time to work.

    Seriously though, what’s the alternative to the corrupted system we’ve got? It may be a corrupted capitalist system, but at least it’s capitalism, and that’s better than any damn commie/socialist system, according to conventional wisdom.

    Maybe Time will name these lawyers as people of the year, and get some more attention to what’s happening in Florida. But, looking back on the Enron whistleblowers, how much affect did they ultimately have? I mean, think of the businesses! Few bad apples, etc., etc.

    I still believe the problem is that the corrupted leaders have declared themselves capitalists, and to the majority of the public, the only other choice is socialism, and that’s out of the question due to years of propaganda. It’s just too bad no one stops to question just how these yahoos can dare call themselves capitalists.

  18. flipper says:

    Barry, off topic, but i guess comments are the best way to bring your attention to this:

    http://www.economist.com/printedition/2011-10-01

    Does the “Be afraid” Economist cover qualify for contrary indicator?

  19. HEHEHE says:

    Come on now BR; enough with the negativity. Ms. Bondi is a leader; a visionary. She now has a multi-million $ a year job waiting for her in some bank’s legal department or as a mortgage industry lobbyist in her future. The last thing we need is a bunch of subordinates in the country’s AG offices exposing sunlight on things. You need to show those people what the “right thing” is all about.

    PS. Speaking of AG’s; was that Eric Holder on TV Monday? I thought he was dead?

  20. HEHEHE says:

    RE Judges,

    You need to keep in mind that most state and municipal judges are elected so there’s really no difference between them and any other scumbucket politician. Second, in jurisdictions where judges are appointed the appointee is typically some political hack who cashed in his chips with whatever party is in charge. They are almost worse because at least the elected ones have to go back in front of the electorate to justify their record – unless of course the electorate is in some batsh*t crazy jurisdiction.

    In a few rare instances you get a judge who is appointed/elected who actually views the job as important enough to be above the political fray, isn’t seeking to further their career and calls bs when they see it before them. Rakoff in the SDNY comes to mind.

  21. budhak0n says:

    At “some” point, you become sick and tired of being disgusted and just throw your hat into the ring.

    Let’s rock and roll.

  22. budhak0n says:

    Oh and why is everybody angry at Warren? He’s just the beneficiary of a system gone wild.

    He, himself, is not complicit. That’s like saying the manufacturers of Coke or Pepsi are guilty of being snake oil salesmen.

    You pay for the product. That’s on you.

    “Americans” need to stop being fat overweight victims. You don’t like how much money somebody makes? Go make more. You don’t like a way a company does it’s business? Go do your business differently or patronize a different business.

    Other than that, and this goes for just about everyone, Stop the incessant whining.

  23. Invictus says:

    Welcome to Easy Answers to Easy Questions. Today’s question comes to us from TBP proprietor Barry Ritholtz:

    Is everyone in public office merely a whore selling their services to the highest bidder?

    Yes.

    Thanks. See you again next time.

  24. orvil tootenbacher says:

    Florida is ruled by graft, money and demi-crooks. There is a good reason why all rich crooks move there. And it ain’t the lack of a state income tax.

    Florida, it’s America’s wang.
    - Homer Simpson

  25. Raleighwood says:

    Our leaders are psychopaths.

  26. peakeverything says:

    “Is everyone in public office merely a whore selling their services to the highest bidder? ”

    Yes.

    Thanks for playing ‘Simple Answers to Stupid Questions’

  27. Petey Wheatstraw says:

    budhak0n:

    There’s a big difference between playing at being a victim and being a victim. Don’t like criminals? Be a bigger criminal!

  28. peakeverything says:

    Sorry Invictus – great minds thinking alike

  29. budhak0n says:

    @Petey. At this point, I don’t think anybody can even tell the difference.

    And at times, I’m sort of at a loss to figure out which side of the $ issue even BR stands.

    Is it his contention that foreclosure companies are standing in the way of Banks repossessing the house or is he supportive of those people who bought these homes and refuse to make the payments?

    Or is he upset over the fact that the market has not been allowed to bottom and have the homes resold to people who can actually afford to live in them?

    This entire mess has become so out of touch with reality that even those who have been trying to follow the bouncing ball can’t tell the difference between the good guys and bad guys.

    It’s just fuel for a fire that continues to burn that NOBODY even understands the purpose of the fire.

    Once an issue ventures to a point where it’s so absurd that even the Monty Python crew would say that’s just silly, it’s time to just let it die and move on.

    So that’s what everybody REALLY needs to do…. Fuhgeddabout it and move on.

    Yesterday is gone. We have only today.

  30. [...] Florida Attorney General, like Congress, is bought. (The Big Picture) [...]

  31. Moe says:

    I love this quote from yesterday:

    On the earnings conference call, JPMorgan (JPM) chief Jamie Dimon expresses less concern about the EU debt crisis than he does the Volcker Rule. He claims the restrictive market-making provisions could “strangle” U.S. banks.

    I’ll translate. “Strangle” = means they’ll only make millions as opposed to 100s of millions.

  32. Petey Wheatstraw says:

    budhak0n:

    Maybe a good rule of thumb is that the entity enriched by the criminal activity is the perpetrator, and the person bankrupted by it the victim. Of course, there is the concept of contributory negligence or criminality, but even then, no one should be allowed to profit from the crime.

    BTW: The homes haven’t been resold:

    http://www.washingtonpost.com/business/economy/banks-turn-to-demolition-of-foreclosed-properties-to-ease-housing-market-pressures/2011/10/06/gIQAWigIgL_story.html?hpid=z1

  33. b_thunder says:

    Upset about the AG situation? Then join 99% movement! Or better yet, allow them to download your book!

  34. budhak0n says:

    @petey. There’s no debtor’s prison in the united states. We have bankruptcy law protections.

    I think what’s going on here is that people just FUNDAMENTALLY misunderstand the nature of the law, lending, real estate transactions and the like and instead of educating themselves or paying counsel who could explain it to them, they’ve elected to play the victim.

    If you bought a house for more money than what it’s worth, you did so by exercising your freedom to contract.

    Unless you were forced to participate in that transaction under some influence of fraud or duress, the subsequent devaluing of the asset of you purchased by market forces has very little to do with your “rights” or anything criminal.

    The lender is not required to sell the house for you, or to make you whole. The way to prevent such things in the future is to purchase things you own with your own money and not credit.

    It’s really not that complicated.

  35. budhak0n says:

    That’s why in a situation where the house is worth less than your mortgage balance, if you elect to walk away from the house, that’s your right.

    No police officer will come to your door because you defaulted on a debt unless the money was obtained under false pretense.

    NOW THERE’S THE REAL ISSUE. How many of these bobo notes and bobo housing developments were built and sold on Nothing BUT false pretense?

    But we’re not stupid. There’s so many we’re never going to examine that issue at all. That’s an exercise in lunacy.

  36. Jim67545 says:

    If someone is convicted of being a traitor to the country they can be executed. If someone robs a candy store with a gun and steals $500 they might get 25 years. If a judge is convicted of taking $50k in bribes, they get 3 to 5. Is not the acceptance of bribes by a public servant tantamount to being a traitor to our country? Would this prevalant problem be as much of a problem (for any public service) if selling out the publics’ trust would carry a mandatory minimum sentence of 25 years? The reward won’t go away. The risk needs to be raised.

    Second, where I lived until recently there was a local elected judge who simply chose not to make a decision. She would send parties back to negotiate a settlement until they gave up and either settled or withdrew the action. Yet, she was of a well known family, kept her nose clean, was pleasant to look at and was a Democrate in a 80% Democratic county. The populace had no idea how inept she actually was. The local attorneys were afraid to speak out fearing retribution when they next stood before that judge and they judged their chances of unseating her as nil. The local paper was a joke. So, status quo was entrenched.

    The point: not all ineptitude in the courts is the product of payola. A lot of it is the product of the uninformed elective process where judges’ records are rarely exposed to the electorate and not of much interest to the electorate anyway.

  37. kscrawford says:

    There is a reason, and its not a good one, why congress is sometimes referred to as a parliament of whores. Its a crime that so many see the carnage that is happening and yet feel so helpless to do something about it.

  38. Petey Wheatstraw says:

    budhak0n:

    There was duress AND outright as well as suborned and outright fraud in many cases. I witnessed it, firsthand (as with contributory participation, there’s also enticement and or entrapment, and it’s just as illegal as anything else). I’ve detailed what I saw many times here, in the past, so I won’t go into the details again. Don’t forget that people were lending OPM and counting on fees and performance bonuses, as opposed to repayment of the loan, in order to enrich themselves. There are such things as fiduciary duty and due diligence.

    I think what bothers most people is that the banks — who were clearly in the wrong in most, i not all cases — were bailed out, and the average Joe, wrong or right, was not.

    Most people only have access to credit, not money (in the form of savings or income). The transition to a credit-based economy was driven by the banks, not the consumer. In light of the usury rates most folks pay to participate in the credit economy, the real power of marketing/propaganda, and their use to entice virtually our entire populace into participation against their own best interests, cannot be discounted.

  39. budhak0n says:

    @Petey…. I was one of the people who was voicing your exact concerns DURING the time when it was all occuring.

    To try and bring the issue up, 3 years after the fact after having ignored it all when the issue was actually on the table, is TRULY… at it’s very core… an exercise in futility.

    It’s like lamenting why your guy didn’t WIN after a presidential election.

    It doesn’t matter why or who didn’t WIN, it only matters who did. There’s never going to be any revisionist history here. You can’t legislate outcomes and frankly legislation itself is a lonely and oft misused weapon.

    We constantly attempt to legislate yesterday’s issues. They’re way too fast for that.

    If we had a national banking system and you were limited as to who you could go to in order to borrow capital, then people might have an actual gripe.

    Truth is, there’s plenty of companies out there who will lend to homebuyers. If you defaulted on the money you borrowed, and then do not qualify for a mortgage at this time, well that was your choice.

    This whole idea that I was entitled to that money is nonsense. Regardless of the subsequent securitization of your borrowing, if your primary concerns involve an individual transaction you’re really barking up the wrong tree.

    My guess is that many of these “lenders” would never TOUCH some of the areas where the greatest offenders have been because frankly they’re sick of the two faced nonsense.

  40. ancientone says:

    BR, I’ve lived in Florida since 1968, and the bad guys took over a long time ago when Jeb Bush became governor and the fat cat Republicans took over the legislature, relying on all the retirees not wanting to pay any taxes, even for necessary stuff. Ever since then we have had the same kind of government that the whole country had for the fifty years after the civil war, when big business ran the country for its own profit. The people, workers, didn’t matter a bit. We are seriously screwed.

  41. [...] Florida AG Takes Orders, Money from Fraudclosure Firm Of course, we know those denials are nonsense, and these investigators were tossed because they were actually doing their jobs, rather than looking the other way. AG Bondi has been criticized by Florida lawyers for accepting campaign contributions from companies the AG’s office is investigating. [...]

  42. Low Budget Dave says:

    Florida doesn’t have recall elections. The legislature and state offices are controlled by Republican super-majorities. That is why we have a Governor who had to plead the 5th more than 70 times to avoid jail time, and a legislature that thinks the only amendment to the Constitution was the 2nd.

    Property rights? In Florida? Property rights are for rich people. If you want to protest your property rights, stand over there by the bulldozer in the “free speech zone”.

  43. AHodge says:

    ah well
    i waited too late for my Bof A lawsuit
    i was really looking forward to be the next to foreclose on one of THEIR Branches
    or are the judges still ok?

  44. HEHEHE says:

    “Florida is ruled by graft, money and demi-crooks. There is a good reason why all rich crooks move there. And it ain’t the lack of a state income tax.”

    Don’t forget the Homestead Exemption:) Those boys from WorldCom etc weren’t building those mansions down there for nothing.

  45. Expat says:

    @Jim67545: I agree. I have always held the fairly radical (judging by the reaction I typically get) view that an elected official should be held to a much higher standard than normal citizens. Any elected official who is convicted of a felony which in any way involves his office should be executed. The same does not apply to citizens who have not sworn to uphold and defend the Constitution.

  46. notakid says:

    “Yesterday is gone. We have only today.”

    Yep, maybe you have a shot at owning/running the re-education camps.

    Just get over it and buy up a judge or a senator or a mayor and make money baby, no matter how , everything is possible after all we have only the morals of today’s position to worry about.

    Just cheat baby just lie baby just WIN baby.

    Funny that the above position leads to no trust anywhere and that doesn’t support any capitalism you could survive in.

    No mistake.

  47. Invictus says:

    @peakeverything at 8:56

    No worries.

    What you said.

  48. philipat says:

    How about someone starts to propose serious alternatives. I appreciate the difficulties and that not all of this is even feasible or possible, but to start the ball rolling:

    1. All elections to be publicly funded (No other funds allowed) Yes, there is a cost but the cost to society in its broadest sense would be net lower.
    2. Term limits on ALL elected positions.
    3. Elected Officials may not enter private business in a directly related area where there would be inherent conflicts of interest.
    4. No Lobbyists and/or no Lobbyist.Corporate contributions to political campaigns (Not made any easier by rulings of the Supreme Court ruling that a Corporate entity is the same as an individual for the purposes of political giving)
    5. No earmarks
    6. Balanced budget amendment

    That would be a good start. The problem is the vested and incumbent interests (Including both Political parties) have no incentive to change because maintenance of the status quo is in their own best interests. And so, the show goes on.

  49. [...] Florida AG Takes Orders, Money from Fraudclosure Firm (October 12th, [...]