FIRM COMMENTARY: This Office previously advised Homeowners in Financial Distress of our meeting with Nevada chief deputy attorney general John Kelleher, the original lead prosecutor in the “robo-signer” fraud case against Lender Processing Services (“LPS”). The meeting was the Firm’s opportunty to share research documenting the systemic pattern of fraud engaged in by lending industry players so as to effectuate “relief of stay” in bankruptcy and ultimately foreclosure.
Soon after the meeting, Kelleher left his job. Now we know why. The article below explains that Kelleher was also in foreclosure. LPS is attempting to use that fact as basis to allege “misconduct” by the Nevada AG. The allegations are without merit. The key rule of professional responsibility on conflicts of interest cited in the Nevada Journal article is Rule 1.7. This rule states that “a lawyer
shall not represent a client if the representation involves a concurrent conflict of interest,” which is defined as “a significant risk that the representation of” his client “will be materially limited by … a personal interest of the lawyer.”
According to a former prosecutor familiar with the case, Kelleher’s involvement in a foreclosure did not materially limit his ability to represent the State of Nevada…it materially enhanced it. LPS is engaged in a campaign to pick off aggressive prosecutors dating back to the firing of two Florida AGs. It’s not even a close call: The fact that the Nevada prosecutor of LPS employees for forging documents in unrelated foreclosures was the
subject of a residential mortgage foreclosure is not a ‘serious, undisclosed, disabling conflict of interest’.
The Nevada AG’s office knew that DAG Kelleher had himself been the subject of a foreclosure. The Kelleher removal from the case followed the sham $25 billion settlement during which the handful of State AG’s that appeared to be conducting serious investigations all folded up their tents and marched to US AG Eric Holder’s tune. Kelleher is collateral damage in a settlement that betrayed homeowners and taxpayers nationwide. Standard operating procedure whenever our federal government deals with the financial services industry.
See the article below:
Did Nevada Attorney General Catherine Masto’s office overstep legal boundaries, committing misconduct in their pursuit of mortgage servicers?
That’s the question raised by a story at the Nevada Journal that details the criminal prosecution by the state AG’s office of two title officers at Lender Processing Services ($24.19 -0.3299%), in an ongoing robo-signing lawsuit.
Defense attorneys for the two LPS defendants claim that the state AG covered up a conflict of interest involving former Nevada chief deputy attorney general John Kelleher, the original lead prosecutor in the case.
Many of the model rules of ethical conduct adopted by the American Bar Association and, subsequently, by the Nevada Supreme Court as the rules of professional conduct for Nevada attorneys appear to have been violated by both Kelleher and Masto.
The Journal links to a copy of the court filing, which argues that prosecutor Kelleher had a “serious, undisclosed, disabling conflict of interest” — he’d received a Notice of Default on his primary residence in September 2011, identifying LPS as the document processor.
Masto’s office became the first state AG’s office to file criminal robo-signing charges in November 2011.
Kelleher’s own mortgage default and engagement with LPS personally were never disclosed to the court, the filing claims. The court filing also argues that Masto’s office was aware of the conflict and sought to cover it up both before and after removing him from the case in March of 2012. Kelleher resigned from the AG’s office in April.
Kelleher has maintained in a separate media report that he was the target of a private “deal” cut by Masto’s office during the multi-state robosigning settlement, a claim Masto has denied.