Tuesday, July 30, 2013

Whistleblower: Colorado Foreclosure Mill Padded Billing Hours, Destroyed Evidence Sought By State AG In Probe Into Suspected Inflated Fee Racket

In Denver, Colorado, The Denver Post reports:

  • An attorney turned whistle-blower at Colorado's second-largest foreclosure law firm has detailed to state investigators a pattern of abuses that stretch beyond the scope of their investigation into alleged overbilling practices.

    Susan Hendrick testified at a hearing Thursday that she told the state attorney general's office about bill-padding she witnessed while a lawyer at Aronowitz & Mecklenburg in Denver, conduct that investigators say needlessly cost homeowners facing foreclosure millions of dollars. She then laid out a number of other alleged abuses she says happened.

    The abuses ranged from the padding of attorney hours to allegations that the law firm destroyed evidence that prosecutors were seeking in their investigation into billing practices by foreclosure law firms, according to testimony in Denver District Court.

    The hearing before District Judge R. Michael Mullins was to determine whether Hendrick, an associate at Aronowitz since 2007, was a special counsel to the firm in its efforts to clean up the problems she exposed.

    Attorney Robert Aronowitz, 65, testified he was "absolutely shocked" by Hendrick's revelations and that he had hired her as a special counsel to give advice on how to fix the issues she raised in several e-mails. "I'd never seen anything like (the allegations Hendrick made) in my entire practicing career" that spans nearly 40 years, he testified.
  • Hendrick hotly denied ever representing Aronowitz as a special counsel, telling Mullins that she was preparing to file her own whistle-blower lawsuit against the firm, mostly because she said she was threatened with the loss of her job if she refused to sign confidentiality agreements to silence her.

    Aronowitz said the agreements were standard for the industry after nationwide investigations into robo-signing and other misdeeds by the nation's largest mortgage banks and servicers.

No comments: