Disbarred Plantation foreclosure attorney David J. Stern has settled a lawsuit brought by the Chinese company that bought his back-office company operations for $60 million cash.
The confidential settlement was announced Tuesday in Broward Circuit Court, according to court filings.
DJSP Enteprises Inc., Chardan 2008 China Acquisition Group Corp. and DJS Processing LLC sued Stern in 2012, alleging he made fraudulent misrepresentations when selling exclusive rights to his back-office and foreclosure processing operations to the Chinese companies in 2010.
While the sale initially brought DJSP $260 million in revenue in 2009, the company collapsed during the robo-signing scandal and dissolved two years later.
The lawsuit alleges Stern knew when he sold the company that it was filing incomplete and forged court documents and filing affidavits executed by people who were supposed to be completed by people familiar with the defaulted mortgages but weren’t.
The Law Offices of David J. Stern, at one time the largest foreclosure filer in the state handling 20 percent of all foreclosures, ceased operations in early 2011 during a Florida attorney general’s office investigation of its foreclosure practices. The law firm was fired by Fannie Mae, Freddie Mac and major national mortgage lenders and servicers.
About 200 employees were laid off by the Plantation law firm. DJSP, which has 1,2000 employees at its peak, shared the same building.
DJSP was represented by Robert Zarco and Robert Einhorn of Zarco Einhorn Salkowski & Brito of Miami. Stern was represented by David Keller and Raymond Robin of Keller Landsberg of Fort Lauderdale.
Other claims brought by DJSP remain pending against an investment advisory firm, P&M Corporate Finance, and an auditor, McGladrey & Pullen, for allegedly providing faulty advice to Stern and his law firm upon which DJSP allegedly relied in proceeding with the transaction.
Stern lost his law license in January.