The only executive convicted of a widespread foreclosure fraud that pumped out more than a million faulty mortgage documents has been sentenced to five years in federal prison, prosecutors said Tuesday.
Lorraine Brown, a former executive at Jacksonville's Lender Processing Services, orchestrated a massive "robo-signing" scheme during the housing boom and bust, Department of Justice officials said.
Low-wage workers were trained to forge and falsify signatures on thousands of mortgage papers a day, whisking fraudulent documents into foreclosure courts across the country. Between 2003 and 2009, the subsidiary where she served as chief executive, DocX, netted about $60 million in revenue.
Brown, 56, pleaded guilty in November to conspiracy to commit mail and wire fraud. In addition to her prison term, she was sentenced to two years of supervised release and ordered to pay a $15,000 fine.
In a statement, Acting Assistant Attorney General Mythili Raman called Brown's sentence "appropriate punishment for someone who sought to capitalize on the nation's housing crisis."
But critics say Brown has served largely as a scapegoat for what they call a deeper systematic fraud.
"She was a rung in a very large ladder that extended up to the executive suites at Wall Street banks," journalist David Dayen wrote in Salon. "They wanted a layer of plausible deniability – in fact for circumstances just like this."
Contact Drew Harwell at (727) 893-8252 or [email protected]