Chain of Title (23 page)

Finally they found the attorney general's table, manned by a short blond woman with glasses. Lisa approached angrily. “I called in a complaint a couple months ago. I had a ninety-minute conversation with someone in your office, and I was supposed to give a video deposition, but nobody followed up. I really need to speak to June Clarkson.”

The woman looked at Lisa and said, “I'm June Clarkson. I'm happy to hear from you.”

When June spoke with Lisa in October, she'd just started working at the Economic Crimes division. She didn't even have a phone extension. None of the secretaries knew who June was when Lisa called in, and so they couldn't figure out where to transfer the call. It was just a mix-up.

The Economic Crimes division had been early in identifying trouble at Countrywide, the subprime giant, and played a role in the multistate enforcement order against the lender. It investigated a wide range of consumer fraud issues, from puppy mills to pill mills and even foreclosure mill law firms. Complaints from individuals got reviewed at the main attorney general's office in Tallahassee, then referred back to the regional offices. Republican Bill McCollum, a twenty-year congressman and a House manager in the Bill Clinton impeachment trial, became Florida's attorney general in 2006, with clear designs on the governor's mansion. It didn't hurt someone running for governor to build a record of protecting consumers. So there was an opening for prosecutors to get aggressive.

June told Lisa and Michael to drop by the Fort Lauderdale office the following week and to bring in all the evidence they had gathered. Lisa said,
“You don't get it. There are hundreds of thousands of documents across the state.”

“Just bring in everything,” June replied.

Before Lisa and Michael went to Fort Lauderdale, they checked with Tom Ice about the status of the investigation into Erin Cullaro, the Economic Crimes division lawyer who moonlighted notarizing Florida Default Law Group affidavits. Ice Legal discovered that Erin Cullaro used to be the expert witness on these affidavits, with her sister-in-law Lisa Cullaro serving as the notary. When Erin left for the attorney general's office, they switched places.
Tom Ice obtained Erin's “Request for Approval of Dual Employment Outside State Government,” filled out months after she entered public service. Erin wrote that she planned to “notarize documents,” without naming the employer, Florida Default Law Group. She also stipulated that the dual employment would “not create a conflict of interest nor the appearance of impropriety,” and that it would not take up too much time. According to the request, she would only notarize documents from 7:00 to 7:15 p.m. on Mondays, Wednesdays, and Fridays.

Despite such a cramped work schedule,
Erin Cullaro managed to notarize 150,000 FDLG documents in just over three years. She received a $2 fee per notarized document, putting her annual compensation from FDLG close to six figures for what she alleged was forty-five minutes of work a week.

Tom and Ariane cross-checked the affidavit dates with a calendar, finding that Erin notarized documents on days other than Monday, Wednesday, or Friday. She also signed on days when travel records indicated that she was outside the state, meaning she couldn't have possibly witnessed the document preparation.
Ice Legal also found Erin's signature in several different handwriting styles, suggesting that she didn't sign those documents herself but just lent her name to the process, allowing her and her sister-in-law to split the proceeds. This was exactly the conduct the Economic Crimes division should be investigating, and one of its own staff was engaged in it.

Tom hadn't yet deposed Erin and Lisa, as FDLG filed a motion for a protective order to stop any testimony. Foreclosure defense attorney Matt
Weidner also had a case going with the Cullaros, and when he tried to take their depositions, their attorneys released an old document that they claimed included Matt's forged signature. A contractor installing a driveway for Matt signed a permit himself when Matt wasn't around. The difference was that the contractor never filed the document with a court, it had nothing to do with the foreclosure case Matt was defending, and they found one signature of Matt's versus 150,000 from the Cullaros. With typical understatement, Matt raged about secret-police-style blackmail. Whatever the analogy, it showed that the Cullaros were willing to do anything to cover up their actions.

The week of Lisa and Michael's meeting, a judge ruled that Ice Legal's deposition of the Cullaros could go forward; FDLG doggedly filed a motion to reconsider. They also withdrew Cullaro affidavits statewide, including in Lisa's case.
FDLG wanted to pretend 150,000 Cullaro affidavits never existed; like the familiar effort by weekend hackers on Florida golf courses, they sought a mulligan.

After hearing all this, Lisa decided she would have to tell June Clarkson about her colleague's extracurricular activities. This made Michael highly uncomfortable. “We're going to go into their offices and tell them that they're a bunch of frauds?” But Lisa was adamant. June told her to bring everything, after all.

The reddish brown 110 Tower in downtown Fort Lauderdale, near the Broward County courthouse and the local jail, took up a city block. The Economic Crimes division of the Office of the Attorney General was located on the ninth floor. A security detail led Michael and Lisa to the offices. They had to go up in one elevator, change cars, and then go back down to reach the ninth floor. Security brought them into a conference room obscured by tinted glass. They had to turn off their cell phones, and they couldn't leave the room without an escort, not even for the bathroom. Lisa asked for a glass of water; security said no. Michael wondered whether this was a meeting or an interrogation.

After a few minutes June walked in with a colleague, Theresa Edwards, a taller woman with red hair and piercing blue eyes. June said hello curtly and sat down. Their demeanor made it clear this was a business meeting, not a social call.

“Before I start,” Lisa blurted out, “I'm just a little concerned about your colleague Erin Cullaro.”

“We do have a colleague named Erin Cullaro. She works in the Orlando division,” Theresa said. “What's your concern?”

Lisa slid a set of documents across the conference table. “Here are my papers, with my name on them,” Lisa said, “and here's her signature on my papers. Now, I heard you're investigating this foreclosure mill, Florida Default Law Group, and Erin Cullaro is signing documents and foreclosure papers for the same firm.”

June scowled. “This can't be the same person,” she said. She and Theresa told Lisa and Michael to wait there, grabbing the documents and storming out.

Lisa turned white. They could not contact anyone outside the building. They could not leave the conference room. These state prosecutors had her foreclosure documents. And they looked angry. Michael, who earlier said he was attending this meeting under protest, gave Lisa an I-told-you-so look.

“What?” Lisa said in response. Did Michael really think these prosecutors would arrest them for telling the truth? Then again, it was her word against a colleague's. Anything was possible.

With the situation heightening his existing paranoia, Michael conjured visions of secret jail cells in the basement. The day before, Michael texted friends, telling them where they were headed. “If you don't hear from me, you know what to do,” he told them. He even set up his friend Deirdre with bail money. Michael pulled out his phone and turned it on, desperate to reach the outside world, but he couldn't get any service. Lisa's phone also had no bars. Michael pointed to a computer in one corner of the room, but neither of them wanted to appropriate government equipment for their own purposes.

“How are we going to get out of here?” Michael asked. Lisa began to tremble.

They could do nothing but sit. And wait. And wait. It seemed like hours went by. Nobody checked on them; nobody came to the door.

Finally, after what was in fact only thirty minutes, June and Theresa returned, their expressions changed from fury to something more like embarrassment. June spoke first. “We want to apologize. This is the Erin that we work with. We'll be looking into this.”

That set the tone for the meeting. Lisa and Michael showed them the BOGUS documents, the impossible notarizations, the faulty endorsed notes. They pulled out a new assignment Lynn had written about, where DocX forgot to change the effective date, so it read
9/9/9999 (meaning the homeowner didn't have to worry about foreclosure for around eight thousand years). They traced these bad documents back to specific third-party processors and foreclosure mills, and provided examples of fellow Floridians who were kicked out of their homes using this questionable evidence. After months of practice, Lisa and Michael crafted a persuasive case that banks had botched the ownership records on an untold number of properties and, instead of fixing their mistakes, decided to fudge it.

June Clarkson and Theresa Edwards had to acknowledge how plausible it sounded. These were official documents submitted to state courts and recording offices. And the Erin Cullaro situation enabled Lisa and Michael to earn their trust. They all exchanged information and agreed to stay in touch.

Immediately after the meeting, June and Theresa told their supervisor, Bob Julian, about Erin Cullaro's extracurricular activities with Florida Default Law Group. They discovered what Michael and Lisa already knew: Erin had special dispensation to act as a notary on certain days and certain hours of the week. But Lisa and Michael told them how Ice Legal determined that Erin couldn't have signed all the notarizations on those dates.

On March 26 Matt Weidner couldn't wait any longer. Fuming about the Cullaros' sleazy effort to muzzle him,
he posted one of Ice Legal's court memos, showing Erin Cullaro's position with the attorney general's office and her array of signatures. Michael had been holding back on this for months, but
after Weidner's release he ran with it, too. Michael added a screenshot showing that Erin Cullaro, who was supposed to be an independent “expert” for Florida Default Law Group, was actually their lead attorney before changing jobs. “The best way to stop a criminal investigation is to become one of the investigators,” Michael wrote.

In their bid to avoid depositions, Erin and Lisa Cullaro promised to never again sign affidavits for Florida Default Law Group. But a week after everything went public, Michael found an FDLG affidavit for reasonable attorney's fees signed by
John
Cullaro.
Apparently he replaced his wife as FDLG's expert witness. Could the employment pool in that part of Florida
really be so thin that it narrowed down to one family? Meanwhile, Lisa subpoenaed the Cullaros for testimony in her foreclosure case, prompting telephoned threats from John, who was also his wife's lawyer. “Let the judge decide,” Lisa yelled back, and hung up the phone.

June and Theresa got another lead when the FDIC's Sheila Bair forwarded Lynn Szymoniak's letter about foreclosure fraud to them. Lynn came to Fort Lauderdale for a meeting with a binder of examples from DocX and Lender Processing Services, gift-wrapping the entire scheme for the prosecutors. June and Theresa were initially skeptical of an industrywide conspiracy, but it was hard to retain such doubt amid the evidence. They asked Lynn a familiar prosecutor's question: what's the worst thing someone will say about you? Lynn replied that she had children out of wedlock. Theresa cracked up. “So did I,” she said.

On April 29, attention-hungry attorney general Bill
McCollum announced that his office was investigating FDLG and Lender Processing Services/DocX, which was unusual because he hadn't yet filed charges. The release noted that the civil investigation concerned “fabricating and/or presenting false and misleading documents in foreclosure cases.” The Economic Crimes division in Fort Lauderdale, aka June and Theresa, would handle the case.
The attorney general also opened an inspector general investigation into Cullaro's activities with FDLG.

It would take more than a year before Cullaro was fired. But after having their pleas for support met with indifference, skepticism, or outright laughter, Lisa and Michael finally had some positive reinforcement. This was a crack in the foundation. And they wanted to ensure that crack would grow.

14

THE RALLY IN TALLY

February 24, 2010

At a local costume shop on Okeechobee Road, Lisa Epstein helped Michael Redman zipper himself into a plush pig outfit, complete with anime-style large eyes and a cartoonish smile. Michael looked like the mascot for a local sports franchise (“
Ladies and gentlemen, here are your West Palm Beach Swine!
”). Lisa rummaged through the aisles, finding a tuxedo with glittery lapels, dollar-sign earrings, white gloves, a top hat and cane, and a bushy moustache. She was a monocle away from being the Monopoly man.

The costume shop clerk, who rarely saw customers outside of Halloween, asked, “What are you guys doing this for?”

“You wouldn't believe it if we told you,” Lisa answered.

The clerk hesitated for a moment. “Oh, wife swapping?”

“What? No!”

A few days later Michael and Lisa were heading to the massive Palm Beach County Convention Center, which they had been scoping out for two days. For a few years the Neighborhood Assistance Corporation of America (NACA) had been holding multiday Save the Dream events all over the country, for tens of thousands of homeowners. NACA rented out large arenas and brought in mortgage servicers, encouraging them to negotiate one-on-one workouts on the spot, into NACA-approved loan modifications. They operated through a combination of radical activism and pragmatic partnerships with the banks.

Now NACA brought Save the Dream to West Palm Beach. Michael thought NACA would be an excellent location to call attention to legislation
pending before the Florida legislature to strip away homeowners' rights and allow the Great Foreclosure Machine to hurl forward unmolested. The fight had to reach beyond the foreclosure blogs to generate maximum pressure, he insisted.

Lisa and Michael planned to crash NACA on Saturday—by now Michael's weekend prohibition had gone out the window. That gave them two days to strategize. They walked among desperate homeowners, mostly low-income Latino and African American couples waiting hours for assistance. They identified security guards and where they patrolled. They mapped out a route for breaking in and for escaping. Michael wedged golf tees in the emergency exits to keep them open in case they needed a quick getaway.

Near sunset on Saturday, Michael, Lisa, and Deirdre, their videographer, pulled into the loading dock at the downtown convention center. The costumes were in the trunk; they also brought flyers to pass out. A security guard stopped them and asked them where they were going. “We're with the radio station,” Michael said. He'd noticed disc jockeys broadcasting from the lobby the day before.

The security guard nodded and waved them through. Michael parked, and the pig and the banker donned their costumes right there in the loading dock. They entered through a back door, with Deirdre behind them, and walked onto the wide-open convention center floor. At the JPMorgan Chase and Wells Fargo tables, they passed out flyers and shook their fists. Michael held a big sign reading “
PigsAss.org
.” People cheered, thinking it was part of the program. But after a few minutes NACA organizers spotted the pig and the banker, confirmed they were uninvited, and alerted security.

Earlier that month, the Florida Bankers Association presented state lawmakers with
legislation to make Florida a non-judicial foreclosure state. If the bill passed, judges would no longer have to rule on the validity of foreclosures. Instead, as in twenty-seven other states, banks would merely file notice, give homeowners a nominal time frame to cure the debt, and then kick them out. Under the bill, that period could be as little as ninety days. If homeowners wanted to challenge the foreclosure, they would have to pay a $1,900 filing fee and carry the burden of proving their case. Mandatory mediation between homeowners and lenders, which Florida judges could order, would go away. The bankers pitched the bill as a way to unclog the
cash-strapped court system and somehow prevent neighborhood blight caused by abandoned homes. They gave it an Orwellian title: the Florida Consumer Protection and Homeowner Credit Rehabilitation Act.

Fraudulent documents were so visible in Florida because of its judicial process. Servicers and foreclosure mills manufactured evidence in other hard-hit states—Arizona, California, Nevada—but without judicial foreclosures, they were buried at county recording offices and harder to find. Eviction rates soared in non-judicial states, too. If bank lobbyists could convert Florida, families facing foreclosure would have fewer protections, and hopes of exposing the scandal would dissipate.

The week before Lisa and Michael's NACA infiltration, state senator Michael Bennett, a Republican from Bradenton, filed a version of the bill called the
Non-Judicial Foreclosure Act for Non-Homestead Properties. Florida had broad homestead protections for most homeowners, restricting forced sales upon death or in response to creditor demands. But if homesteaders abandon the property, they lose their protections. “Abandonment” under the proposed statute could mean a homeowner who never responded to the foreclosure notice, left for vacation for three months, failed to pay property taxes, or “act[ed] in a manner that manifests the intent to surrender the property owner's interest.” It looked to Michael like banks wanted to create enough loopholes to let them foreclose on anyone. The day before Senator Bennett's language came out, Wells Fargo tried to evict William Berta of Sarasota because they claimed he “could not be found and might even be dead,” when he was actually living in the residence with his son and two dogs at the time. A process server gave Berta eviction papers at his house after Wells Fargo took the deed in an uncontested foreclosure.
Wells's arbitrary designation of abandonment could end up becoming legal under Bennett's bill.

Michael created a mini-site about the legislation, uncharitably called
PigsAss.org
, referring to Senator Bennett. Jim Chambers, the graphic designer who helped with the happy hour flyers, created a form letter people could fax to their legislators, urging them to vote against the bill. The graphic displayed a homely looking pig with the Monopoly man logo stamped over its posterior.
PigsAss.org
included contact information for Bennett's Tallahassee and district offices along with the names of all his legislative assistants and their phone and fax numbers.
“The Bankers have thrown down the
gauntlet,” Michael wrote at
4closureFraud
. “Let's accept their declaration of war and fight back.”

At the convention center two security guards approached Michael, and he zigzagged away from them, waving his arms to whoops and shouts from the crowd. Bruce Marks, CEO of NACA and a former organizer for the Hotel Workers Union in Boston, tried to take the
PigsAss.org
sign away. Eventually Michael and Lisa got cornered. They were both certain they were headed to jail for trespassing. But security just led them out to the loading dock and left. They headed to the car before anyone changed their mind.

A minute later a security guard came back out and said, “Bruce wants to talk to you.” The guard brought Michael and Lisa, still in costume, to see Marks, who had one of their flyers in hand. “I'm the one who crashes events, not you,” Marks said, and he was right: NACA was known for picketing bankers at their homes and disrupting congressional hearings. “What's all this about?”

Michael and Lisa explained their efforts against fraudulent foreclosures in Florida and the non-judicial foreclosure bill. Marks smiled. “Well, why didn't you just call ahead and say so? We would have let you in!” Michael, still dressed as a pig, shrugged. He never thought of
that
.

NACA Save the Dream events all had a small stage in the middle of the convention center so that homeowners could express their gratitude or organizers could announce the latest statistics on successful modifications. Marks pointed to the stage and said, “Why don't you go up and make a speech?” Michael, naturally, nominated Lisa.

She hadn't given a speech since junior high school, never as an activist, certainly never to thousands of homeowners, and really never while wearing a moustache.

“What are you going to talk about?” Michael asked her.

“I don't know!” she replied.

Lisa stepped onstage, Michael behind her. And they rapidly came face-to-face with America's digital divide. Lisa started talking about the proposed legislation and how they could stop it. “This is a bill written by the Florida Bankers Association for their own benefit!” she shouted. “It would take away our right to a day in court and allow the banks to cover up their massive fraud!” But the audience consisted of low-income victims of
predatory lending, who didn't spend their days reading blogs and who were not attuned to foreclosure fraud. They had no idea what Lisa was talking about. It was certainly entertaining to see a banker and a pig giving a speech, but it didn't penetrate any further. Everyone smiled politely, if they listened at all.

Special interests depend on a disorganized public. They don't want people understanding what lawmakers decide in ornate committee hearing rooms. Keeping the masses preoccupied with their own struggles is critical for unmolested profit-taking. For all their successes, Michael and Lisa's reach was relatively limited.

Bruce Marks took a picture with the pig and the banker, Michael proudly holding up his sign, Lisa's face mostly covered by the moustache. And then everybody went home. Michael took a break and spent all of Sunday with his wife and daughter. By Monday, he was back trying to figure out how to stop the damn bill.

In March, Florida House member Tom Grady introduced a broader version of the non-judicial foreclosure bill, subtitled the
Homeowner Relief and Housing Recovery Act. That moved through the state Civil Justice Committee and then the Insurance, Business, and Financial Affairs Committee with little resistance. The Senate version, meanwhile, reached the Banking and Insurance Committee. Two Democrats, state representative Darren Soto and state senator Dave Aronberg, crafted response legislation to preserve homeowners' access to the courts and add additional protections—they called it the
Foreclosure Bill of Rights—but Republicans controlled the legislature, so it didn't have much of a chance.

On one of her research jags, Lisa noticed that the Florida Bankers Association held a Capitol Day every year, blanketing Tallahassee with lobbyists to argue its priorities. The 2010 version featured a golf outing and a Taste of Florida dinner at the association's headquarters. Lisa figured that if the bankers could spend a day lobbying the legislature, why couldn't homeowners? Rather than calls or emails or petitions, it was time to get right in the face of the decision makers. When she explained the idea to Michael, Lisa called it the Rally in Tally. He loved it.

Lisa wanted the entire state to participate; after all, this would affect every homeowner in Florida. She asked Matt Weidner if he would be willing
to get people on the west coast to the capital for a rally. In public, Matt joined the chorus of opposition to the non-judicial foreclosure bill, but he knew, because of his family's history in politics, how things worked in Tallahassee. The first year a politician introduces legislation, they view it not as a potential law but as a moneymaking opportunity. The politician can extract campaign donations from people on both sides of the issue, to ensure that “their voices are heard” when the bill gets closer to passage. When the legislation returns for a second year, stakeholders get nervous that it has staying power and might someday happen. That triggers more campaign donations. Only by the third year would the legislature actually do something about it. But in a less cynical moment, Matt recognized the power ordinary citizens wielded in the foreclosure fraud battle, and thought a show of force could help.

They set a date, April 21; buses would drive overnight to the capital for a day of events. The first goal was to raise enough money to get everyone there. Foreclosure defense firms were an obvious target, given their interest in stopping legislation that would make their business irrelevant. Ice Legal sponsored two buses to transport supporters on the east coast. Matt and a colleague, Chip Parker, put together an ad hoc group, Lawyers for Homeowner Rights. Some of his buddies at JEDTI lent financial support, and Matt also got attorney Mark Stopa to pony up for the west coast bus. A group of homeowner activists from Sarasota, in bill author Michael Bennett's district, called themselves the Mortgage Justice Group—they had capes and everything—and made plans to attend.

Lisa was the worst person to handle logistics for a statewide bus trip—she had seemingly no concept of time or cardinal directions, and barely knew how to get to Tallahassee, let alone how to coordinate pickups along the way. But this was her life now, so she gave it her best shot. Lisa ultimately scheduled stops in Miami, Fort Lauderdale, Orlando, Gainesville, and Live Oak, as well as west coast buses for Sarasota and Tampa. She wrote talking points for participants to use when speaking with their legislators, and urged them to incorporate their own foreclosure stories. For those who couldn't make it, Lisa solicited and received letters from homeowners that she would hand-deliver. Lisa contacted the grounds department at the capitol and applied for a permit for a staging area, across the street from the state supreme court. She rented a public address system
and speakers from a soundstage company. She promoted the rally fanatically to the press, connecting it to civil rights–era Freedom Rides. Through Matt, Lisa got April Charney, the founding lawyer of the foreclosure defense movement, to make a speech. Within a couple of weeks it was all set.

While they were planning all this, the bills actually stalled in committee. It was too late to stop the rally, and anyway, as Matt Weidner counseled, the bankers planned to come back next year. So they pushed forward as scheduled.

Late at night on April 20, several dozen homeowners boarded buses across Florida to make the hours-long ride to Tallahassee. Lynn decided not to go; where her partners in foreclosure fighting had grassroots energy, she believed in working the legal process from the inside. Michael drove up separately with his family. He took a vacation from his job at the Toyota dealership and never came back. The rally served as an introduction for Jennifer and his daughter to what he'd been fighting for all these months.