Do you remember how you felt when they told you the Easter Bunny and Santa Claus weren't real? Maybe you'd figured that out on your own, or maybe you were like my younger brother and heard it from me when you were five years old -- he's still recovering from that trauma. I may as well have told him that the crew members from Sesame Street were dealing meth.
I'd imagine that's pretty close to how many of the foreclosure/mortgage activists and advocates feel about the recent news that their foreclosure hero, Lynn Szymoniak, may not be the caped crusader they all thought she was. In fact, she may be as predatory and opportunistic as the banks she claims to be fighting against.
It would appear that Szymoniak acted unethically and possibly illegally, according to a complaint filed on March 14th of this year in Broward County, Florida naming her as the defendant. The accusation claims legal malpractice, breach of fiduciary duty, unjust enrichment, and fraud against her client, Ignacio Damian Figueroa -- a fellow homeowner at risk of foreclosure.
The details of the story should have attorneys pulling their hair out by the roots. It's difficult enough to find an attorney that will defend a foreclosure case, much less one that acts ethically, but to have an officer of the court using the sanctity of the attorney-client relationship for personal gain is truly a story worth everyone's disgust and outrage.
You may remember Szymoniak from her 2011 appearance on 60 Minutes
Szymoniak, for her part, accepted full credit for the work:
A lawyer and fraud investigator with a specialty in forged documents... She has trained FBI agents... She used her legal training to go online and research 10,000 mortgages.
I often, because of my training, look for patterns. And then I began to find the strange signatures. It was a common practice in the last few years to flood the courts with these documents.
The announcer, Scott Pelley, goes on to describe how she painstakingly researched 10,000 documents.Early last year, the media started reporting that Szymoniak had been awarded $18 million for her part in a whistleblower case. The Huffington Post reported:
Szymoniak is getting $18 million as a result of her investigative efforts -- part of a $95 million settlement paid out by Bank of America, JPMorgan Chase, Wells Fargo and Citigroup. That's just one component of the $25 billion mortgage settlement filed earlier this week on behalf of those four banks and Ally Financial.
Isn't that great? We all thought it was. It was very exciting to see someone take on the banks and win -- win big even. Szymoniak was touted as a hero among the foreclosure activists and advocates. Lauded for the grueling, arduous, and painstaking work that went into pouring over thousands of documents to win this case.
Unfortunately, according to the suit, Figueroa, the plaintiff and Szymoniak's client, did the majority of the work. He sent her the research, suggested what kind of suit to file, and provided Szymoniak with everything she needed. She then filed a suit herself, naming herself as the relator, and was awarded $18 million. Got that? Szymoniak was Figueroa's attorney and used his case to make money for herself.
I've spoken with several attorneys over the last week and all are of the opinion that what Szymoniak did was, at the very least, unethical and in violation of American Bar Association's code of conduct.
"[Szymoniak] had a legal, fiduciary, and ethical responsibility to her client and she ignored all of that," said Don St. Denis of St. Denis & Davey, the law firm representing Figueroa.Martin Andelman of mandemanlmatters.com covered the entire case last week in a two piece series. You can read more about the issue in "Some of Lynn Szymoniak's Millions May Belong to Someone Else" and "When Lawyers Break the Rules... The Code of Conduct for Florida Attorneys." Andelman did an outstanding job both researching and explaining the case against Szymoniak and for me to make an attempt at coming close to the level of detail he covers would be borderline plagiarism. I will however provide you with the following CliffsNotes version of the events:
- Figueroa, after thousands of hours of research created these videos that he posted on YouTube.
- Szymoniak contacted him about the videos, according to the suit, to discuss the potential for filing of a class action lawsuit against the infamous foreclosure mill attorney, David Stern. Szymoniak stated that she had been considering filing a class action lawsuit on behalf of homeowners, but Figueroa suggested filing a Qui Tam action because there had been significant damages that had accrued to the U.S. government.
- That same day, Szymoniak expressed, in an email, that she was "very excited about being his lawyer," and later sent a retainer agreement, which Figueroa signed, formalizing her role as his attorney.
- During the following few months and several email exchanges, Szymoniak gives every indication that she is representing Figueroa and Figueroa has no reason to believe she isn't.
- From this point forward, Mr. Figueroa believed that he was now represented by a lawyer whose plans were to file a class action, but now will file a Qui Tam/False Claims case together.
- Szymoniak and Figueroa exchange literally hundreds of emails, most of which is Figueroa providing Szymoniak with thousands of hours of research providing documentation for the case.
This is where it gets interesting: On June 28th, Szymoniak emails Figueroa again, this time saying, "Just so you know, I have NOT (emphasis hers) filed a Qui Tam and have not found anyone willing to do this -- so if you are approached, you should consider this...No one is beating down our doors to help us."
The problem with that email is that she had, in fact, filed a lawsuit in South Carolina on June 4th, on her own. A law suit that would have benefitted her client and one in which she used his knowledge and research in order to file that suit. A suit that she filed not as Figueroa's attorney, but as the Qui Tam Relator -- netting her $18 million of the $95 million settlement.Andelman then writes of Szymoniak:
That has to be very hard on a person... it would very likely cause me to lose sleep. Because I'd know that regardless of my planned defenses to Figueroa's allegations, the facts of the complaint alone, as found in the emails, are not going to make me look good no matter what. And I'd think that would be stressful for anyone, but especially someone who's so widely been seen as a hero.
I suggest you read the articles in their entirety. Andelman has links to the court filings and delves into Szymoniak's family run non-profit, high-end penthouse suite. He has all of the court documents and email exchanges that you can read for yourself.
For his part, Andelman has been vilified on Facebook and in comments for bringing the case to people's attention. Most notably Lisa Epstein of foreclosurehamlet.org said, "This is proof that [Martin Andelman] has been paid by the banks."
It's the same "bankster shill" accusations I've been subjected to when I ask the mortgage birthers to prove their ridiculous, un-researched, and potentially harmful legal theories and strategies.
Epstein is best known for her 2012 vanity campaign for Palm Beach County Clerk of Courts. As Steve Dibert of MFI-Miami wrote:
Her website works in tandem with her man Friday and campaign advisor Michael Redman's site, 4ClosureFraud. The site was financed by Carol Asbury, an attorney who with the help of Redman and Epstein presented herself as helping homeowners and providing foreclosure defense. Asbury is currently serving jail time for mortgage fraud.
Epstein may want to consider going back into nursing or finding a day job because this political humiliation has done irreparable damage to her credibility. It damaged her credibility because by her own admission during the campaign, she is an unemployed nurse and has no experience in mortgage lending, finance or the law.
Even as she confessed to conning low income Latino immigrants into being straw buyers for million dollar homes by abusing No-Doc loan programs and turning the posh town of Wellington into a squatters paradise, [Redman] tried to convince people she was set up by the government.
These characters and their followers are definitely a story for another time, but for the purposes of this article, it illustrate the circles Szymoniak travels in. Here are several videos of Szymoniak, Epstein, and Redman giving mortgage securitization classes on the streets of Florida.
Unlike simply reposting articles without attribution - an infraction for which Redman is notorious, Figueroa's site, stopforeclosurefraud.com has provided reams of court documents in the way of pleadings, filings, decisions, etc. Attorneys, advocates, pension funds, and government offices have flocked to his site to download the information he exhaustively posted as a resource to help homeowners.
Figueroa did this at significant personal and financial expense, while fighting his own foreclosure. At times, due to a lack of donations to the site, Figueroa even posted and uploaded document from his car using free wi-fi networks. The site has over 7,000 posts and documents.
In 2011, I had the opportunity to meet Figueroa in Fort Lauderdale while researching an article. Others who had met him described him as cautious, bordering on paranoia and fastidious when it came to facts. Hardly a character defect when you're pouring through court documents. During our brief conversation, I found him to be incredibly knowledgeable and oddly humble considering his accomplishments and ability to ferret out information.
At the end of our meeting he handed me Szymoniak's card, telling me she was his lawyer.
Figueroa had no question that Szymoniak was his attorney -- no one should. That's important because as an attorney she has an obligation to her client. She certainly couldn't run off with his case and use it to her benefit.
In simple terms: If a client leads an attorney to a rabbit hole and that attorney, while in the rabbit hole, comes across buried treasure, the attorney has a fiduciary and ethical responsibility to hand it over to the client -- at least the lion's share. In this case however, Figueroa drew Szymoniak a map, dug the hole for her, and handed her the proverbial chest and she ran off with it.As Andelman writes in his second piece on this topic about attorney conduct:
Most of us are only concerned about living within society's laws, but certain professions impose a higher standard on their members... doctors and lawyers come immediately to mind, but there are others as well, such as police officers, investment professionals, educators, interpreters, pilots, members of the clergy, and even journalists... all are supposed to adhere to a code of conduct beyond society's laws and rules. Some professions, including both the legal and medical, require individuals be licensed, and breaches of the profession's code of conduct can result in suspension of the applicable license on a temporary or sometimes permanent basis.
Make no mistake, this is far from a simple he said, she said case. Figueroa has hundreds of emails, both to and from Szymoniak proving his case. He is, after all, fastidious when it comes to facts. It is also clearly more than a money grab. The way in which attorneys conduct themselves is in question here.
Figueroa did all the work and ended up with nothing. Szymoniak, his attorney, on the other hand, is using her penthouse non-profit to file similar suits in other states in an effort to further enrich herself.
I understand that people need heroes and that when our heroes show a more reprehensible human side we're disappointed and even hurt. Imagine how you'd feel if O.J. Simpson murdered his wife or Pee Wee Herman were caught playing with himself in a movie theater - hypothetically, of course.
Everyone should be pissed off that this happened. The attorneys generals, Szymoniak's attorneys, homeowners, homeowner advocates, and taxpayers should all be pissed off that an attorney took advantage of a client to essentially walk away with $18 million and accept the title of hero.