Ex-F'closure Mill King Tagged In Suit By His Now-Defunct Document Sweatshop For Allegedly Inflating Income By "Cutting Corners" In Litigation Process

In Fort Lauderdale, Florida, Reuters reports:

• David J. Stern, who became one of the country's best-known foreclosure lawyers before shutting his business under regulatory pressure, has been sued for fraud by the publicly traded company he helped create to take on his now-defunct law firm's back-office operations.



• DJSP Enterprises Inc said Stern, a former chief executive, concealed that his law firm David J. Stern PA inflated revenue by systematically "cutting corners" in the foreclosure process. It said this took place even though the firm knew that such clients as Citigroup Inc, Fannie Mae and Freddie Mac might flee.



• DJSP said the shortcuts included letting workers sign foreclosure documents without reading them, known as "robo-signing," and submitting false or backdated documents to courts. It also said Stern awarded bonuses and "extravagant gifts" to workers who could churn out foreclosures quickly.



• Stern had "specific intent to fraudulently induce DJSP" to assume the back-office operations, the company said. The demise last March of Stern's law firm "directly and necessarily resulted in the destruction of DJSP's business," it added.



• DJSP in January 2010 took on the Stern operations in exchange for paying nearly $60 million in cash to Stern, whose lifestyle included luxury homes and a yacht.

For the story, see Foreclosure lawyer Stern sued by his old company.