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Foreclosure mess: Fake signatures and lavish gifts

By Dugald McConnell, CNN producerOctober 20, 2010: 7:45 PM ET

WASHINGTON, D.C. (CNNMoney.com) -- As the robo-signing scandal continues to unfold, new allegations have been released about attorneys producing fraudulent foreclosure documents and receiving lavish company rewards.

At one of the largest foreclosure-processing firms in the country, documents were signed by an official who hadn't read them, according to documents released on Monday as part of an investigation by Florida Attorney General Bill McCollum.

McCollum joins the attorneys general in all 50 states in investigating the processing of foreclosures and whether homeowners have been evicted by banks without the required reviews or correct procedures.

According to a sworn deposition released by McCollum's office, Cheryl Salmons, the operations manager at the Florida law firm of David J. Sterns, signed off on as many as a thousand foreclosure files per day.

In the deposition, Salmons' former assistant, Kelly Scott, also claimed the law firm rewarded her boss with vacations, jewelry, and a new BMW SUV.

"She doesn't review [the documents]. She just looks," Scott said in her deposition. "She would just sign all of them."

Freezing foreclosures: What does this mean?

When Salmons was out of town, "there was someone else that would sign on her behalf," Scott alleged.

Tammie Lou Kapusta, who was fired last year from her position as the firm's chief paralegal, was also questioned, and she described an overworked office that knowingly filed flawed foreclosures on behalf of banks.

Scott and Kapusta said documents were backdated, signatures were not witnessed, and a notary stamp was passed around for general use -- all in an effort to keep up with a tidal wave of foreclosure filings.

An attorney representing Stern and Salmons said the allegations are untrue.

"No misconduct is occurring at David Stern's law firm, and the firm works very diligently to make sure that all the processing is done correctly," said the firm's lawyer, Jeffrey Tew.

Stern and Salmons declined through their attorney to comment, as did Scott and Kapusta.

If the allegations are true, "that is unbelievable to me, " said Clifford Rossi, a former risk-management official at several top banks who is now at the University of Maryland. "There are a set of legal formalities that have to be processed and gone through."

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