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Foreclosure lawyers face sanctions for false signatures

ANNAPOLIS — Two attorneys facing disciplinary action for false signatures on foreclosure documents went before the state’s top court on Tuesday.

The Attorney Grievance Commission of Maryland says Matthew John McDowell and John Stephen Burson, formerly of Shapiro & Burson LLP, were involved in improper signatures on least 900 transactions.

McDowell would sign his supervisor’s name to deeds and affidavits at the law firm, one of the largest foreclosure firms in the country. McDowell claimed he was simply following the orders of his supervisor, William M. Savage, and did not know he was engaging in unethical behavior.

Burson, who was managing partner of the firm, admitted he failed to properly supervise lawyers and staff, but said he had no knowledge of the improper practice while it was happening.

Savage, meanwhile, only received a “Commission Reprimand” for his involvement — that is, a private action by the Attorney Grievance Commission without involving the Court of Appeals.

On Tuesday, Judge Lynne A. Battaglia questioned the disparity between Savage’s sanction and the 30-day suspension the commission is seeking against Burson.

“I am trying to distinguish culpability and I understand you are basing this on [Burson’s] managing partnership, but the person on the ground was Mr. Savage,” Battaglia said Tuesday.

James N. Gaither, assistant bar counsel, said Burson was more culpable because he acknowledged responsibility for the practice and failed to ensure it did not happen in the first place.

“Had he literally walked outside and implemented a policy, that would have stopped this,” Gaither said.

Burson’s attorney, Deborah Murrell Whelihan of Jordon Coyne & Savits LLP in Washington, D.C., argued that to suspend Burson would establish a “strict liability situation” in which managing partners in the future would be held liable for violations at their firms they did not know about.

“That’s just not fair,” Whelihan said.

The revelations about the firm’s foreclosure practice prompted Freddie Mac to recommend in March 2011 that its mortgage supervisors stop referring foreclosure cases to Shapiro & Burson, which was located in Fairfax, Va., but handled foreclosure work in Maryland.

Shapiro & Burson and a number of Maryland firms engaged in similar practices during the foreclosure boom prompted by the 2008 economic crisis. The practice led the Court of Appeals to adopt an emergency rule in fall 2010 to investigate the irregularities in the mortgage foreclosure process.

Joint petition

McDowell and the Attorney Grievance Commission asked the court to approve a joint petition for reprimand Tuesday. Unlike the Commission Reprimand obtained by Savage, the reprimand will result in a published order by the Court of Appeals.

McDowell, who has worked for the United States Patent and Trademark Office since 2005, worked part-time during evenings and weekends for Shapiro & Burson starting in 2008 to help with the burgeoning foreclosure workload.

The firm had a backlog of trustee’s deeds and McDowell, at the instruction of Savage, would review the deeds for accuracy before signing Savage’s name to deeds and affidavits, which were then notarized by employees of the firm.

McDowell, who was admitted to the Maryland Bar in 2001 and the Virginia Bar in 2004, “was working with Mr. Savage,” said McDowell’s attorney, Stanley J. Reed of Lerch, Early & Brewer Chtd. “He had no reason to think he was being instructed to do something unethical.”

McDowell said he questioned Savage about the falsely notarized signatures in 2010, after the news media began reporting on robo-signing practices elsewhere, but Savage told him what the firm was doing was permitted.

McDowell, who left the firm in early 2011, cooperated with Bar Counsel’s investigation, expressed remorse and has taken at least four hours of ethics training a year.

The false signatures at Shapiro & Burson came to light in March 2011 after a disgruntled former employee sent around an affidavit explaining the firm’s practice. Burson responded by thoroughly investigating the matter and issuing a written policy banning the practice.

“This was not a situation Mr. Burson foresaw, but he took immediate action,” Whelihan told the Court of Appeals Tuesday.

The Attorney Grievance Commission filed a petition for disciplinary action against McDowell and Burson in October 2012. The Court of Appeals appointed Montgomery County Circuit Judge Marielsa Bernard as the hearing judge.

Bernard held hearings in July 2013 and concluded that McDowell had not violated any of the Maryland Lawyers’ Rules of Professional Conduct.

Day-to-day operations

Burson, who has worked as an attorney for over 30 years, served as managing partner of the firm from 1985 to early 2012 and was responsible for overseeing day-to-day operations at the firm. He left the firm and stopped practicing law in 2012 in a kind of self-imposed suspension.

Bernard found no evidence that Savage told Burson he had assigned McDowell to sign deeds in his name. She also found Burson had never accepted the practice and that he did not knowingly mislead anyone about the robo-signings.

The judge did, however, find that Burson failed to ensure the proper signing of deeds and affidavits, and that he did not ensure attorneys and non-attorneys at the firm were following ethical behavior.

In other foreclosure-practice cases, attorneys George Jacob Geesing of BWW Law Group LLC in Bethesda and Thomas Patrick Dore, formerly of Covahey, Boozer, Devan & Dore P.A. in Hunt Valley, were suspended by the Court of Appeals for 90 days in 2013. Both also said they did not realize that signing the name of another attorney was not permitted.

Reed recommended a lesser sanction for his client — a reprimand — since Burson, unlike Geesing and Dore, was not the architect of the improper practice at his firm.