Fired worker says home foreclosure firm forged documents

First, the Florida attorney general's office launched an investigation of four of the state's largest foreclosure firms, alleging made-up paperwork and forged signatures.

Then, some of the nation's largest lenders halted home foreclosures after learning that employees had signed hundreds of thousands of documents without reading them.

Now, in a foreclosure industry bloated by the lingering effects of the housing crisis, a former employee of one of the firms under investigation describes in detail a secret system designed for speed at any cost.

Attorneys and staff members forged signatures and changed dates, casually passed around notary stamps and notarized stacks of blank documents to be filled in later, said the employee, Tammie Lou Kapusta, in an interview with the attorney general's staff.

At the Law Offices of David J. Stern in Broward County, where Kapusta worked, long "signing tables" were set up across eight floors, and employees would process 250 documents per floor every day, she said during the interview.

Two or three employees sat around practicing the signature of Chief Financial Officer Cheryl Samons, at Samons' direction, Kapusta said.

Stern lawyers were overheard saying they worried about breaking the law or getting disbarred, but Kapusta said they worried more about losing their jobs.

Toward the end of the interview, which was conducted under oath with Kapusta's attorney present, she also described romantic relations among people who worked in the office, including Stern.

Stern's office learned about Kapusta's statement Thursday, when it was posted on the Internet and picked up on lawyers' blogs, said Jeffrey Tew, a lawyer representing Stern.

The statement isn't true, Tew said. "It's terribly unfair to circulate these allegations on the Internet," he said.

"I'm a little astounded that the attorney general would proceed this way. It's not fair that we were not aware of this statement and not given the right to question this statement."

He noted that the version circulating on the Internet, which is on attorney general's letterhead, is not signed by anyone or notarized.

The attorney general's office confirmed Thursday that the statement is authentic. The office released it in response to a Florida public records request.

Matt Weinder, a St. Petersburg lawyer who represents clients in foreclosure, said he has heard of allegations like Kapusta's but never in such detail or in a sworn statement. Weinder is among those who posted the statement on the Internet.

"If what the former employee said is true, it's Earth-shattering," Weidner said.

"I'm sure (Stern's office) will say it's a disgruntled employee making it up, but I just don't see a disgruntled employee going on record with the attorney general's office and lying."

Kapusta was fired from her job, she says in the statement, because she raised questions about what she was told to do.

Stern is one of four so-called "foreclosure mills" accused by the attorney general's office of rushing cases through the system and perhaps fabricating documents and signatures.

The other firms under investigation are Marshall C. Watson of Fort Lauderdale, Shapiro & Fishman of Tampa and Boca Raton, and the Florida Default Law Group of Tampa.

They represent about 80 percent of the foreclosure proceedings in the state.

The release of Kapusta's statement comes after announcements by major lenders that they are freezing foreclosure proceedings over concerns about shoddy processing.

GMAC, a unit of Ally Financial, was the first to say it had learned that a processor was signing without reading. JPMorgan Chase did so a week later, and Bank of America halted proceedings late last week.

This week, a Palm Beach circuit judge dealt a blow to the attorney general's probe when he quashed a subpoena the office issued in the case.

The attorney general was seeking marketing materials, but Judge Jack S. Cox ruled in favor of Shapiro & Fishman, calling the subpoena "overbroad, vague, inconsistent and unduly burdensome."

In addition, Cox said, the attorney general lacks jurisdiction to investigate the firm. That authority lies with the Florida Supreme Court and the Florida Bar Association, his order states.

Attorneys for Stern's office have filed a similar motion.