The House Hunter
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Wondery Plus subscribers can listen to scam fluencers early and ad-free right now. Join Wondery Plus in the Wondery app or Apple Podcasts. A heads up to our listeners, this episode contains descriptions of workplace sexual harassment and assault. Listen with care. Sachi, homeownership is central to the idea of the American dream. And now that you live in America, what are your thoughts on buying a house? Let me tell you what I'm holding out for.

I'm hoping that I have some mysterious elderly relative who lives in like a beautiful brownstone in Manhattan who dies, also have mysterious causes, and they leave me the house, and then it's also, it's haunted, and so then I solve mysteries with the ghosts. You know what? That sounds a lot more possible than affording a home. Yeah.

Well, the story I'm about to tell you is about the rot at the heart of the American dream and why it's not so bad that we'll never be able to afford a house.

It's November 2010, and the law offices of David J. Stern are in chaos. That's not unusual for the firm. They handle foreclosures, so there are always tons of people running around, shouting, signing documents, and moving cases forward. But today, David's offices have erupted into a different kind of mayhem. A small army of agents have marched into the building and are now ransacking it.

They're packing up and carrying out box after box of files. David can only stand back and watch as his lucrative empire teeters on the verge of collapse. The firm occupies a huge, pale yellow building that has its own fitness center, courtyard, and even a pond. Really, it looks like a fancy hospital or a hotel. It's located in a Florida town called, I kid you not, Placid.

David's like the most high-end version of a Florida man. He's an intense 50-year-old with a semi-permanent tan from yachting. Here's one of the only photos of him that exist online. He looks like a man happy to be in a boat. He kind of looks like a wax museum version of George Clooney to me. I was going to say, shitty George Clooney for sure. Well, David looks like he knows how to relax, but I guarantee you he is not feeling very chill at this moment.

The guys pillaging his office are from Fannie Mae and Freddie Mac. They've been David's biggest clients for more than a decade. They're the reason his firm has 1,200 employees and gets paid to process tens of thousands of foreclosures a year. The 2008 financial crisis and the collapse of the housing bubble was the best thing to ever happen to David. The number of foreclosures the firm handles has more than quadrupled in the last couple of years with revenues to match.

Eventually, business was so good that people started to question it. And they started asking just how the firm was able to process so many foreclosures.

Now, Fannie and Freddie are firing David in dramatic fashion. And ironically, David is being subjected to the same experience he spent years inflicting on other people, standing around helpless as a group of scary guys dismantle his property. But there's one crucial difference. David deserves it. From Wondery, I'm Sarah Hagee. And I'm Saatchi Cole. And this is Scamfluencers. Coming!

Millions of people lost their homes in the mortgage crisis that started in 2007, and millions more had friends and family who suffered. But there were also a few people who profited while everyone else was losing it all. People who barely faced any consequences.

This is the feel-bad story of one of the people who got super rich by exploiting the foreclosure industry. And of the homeowners who, through sheer force of will, brought some of this nationwide fraud to light. I'm calling it The House Hunter.

This story is a weird one, Sachi. Most of the scammers we cover love the spotlight. But David J. Stern has made every effort to stay invisible. So it probably won't surprise you that when we reached out to his lawyer, we were told he wasn't interested in speaking to us. But we were able to gather some biographical details from depositions he's given, like that he was born in Chicago on May 6, 1960, or that he paid for law school by working as a clerk for the city of Houston.

He also side hustled as a high school teacher and soccer coach. He graduates from the South Texas College of Law in 1986. While waiting to take the bar exam, he starts working as a clerk at a firm owned by a guy named Gerald Shapiro. Gerald is a wildly successful foreclosure lawyer with a comb over and a half-assed Geraldo mustache. Devastating to be Geraldo, period. Extra devastating to be a half-assed Geraldo.

David works for Gerald as the firm's national quality control attorney. That means he's in charge of making sure all of the different parts of Gerald's firm work smoothly. He travels constantly, cracking the whip at underperforming offices and starting up new branches.

You'd think that might be lonely, but David likes the nomadic life. Otherwise, he'd have to be at Gerald's national headquarters in Chicago. And David hates Chicago. So much so that he never even unpacks the stuff in his apartment there. And we don't actually know why David hates his hometown so much. It's all a part of the enigma of David. But whatever is keeping him on the road seems to be good for business—

By the end of 1993, after almost eight years on the job, David has expanded Gerald's firm from 14 offices to 33. But he's not thrilled about doing all this work just for someone else to be in charge. So he leaves to start his own competing firm, the Law Offices of David J. Stern. Well, that's business, baby. Yeah, it's everyone's dream to be like, wait a second, I'm making this company so much money. Why don't I make myself so much money? I would do that to you in a heartbeat.

Oh, God. David sets up the firm in a North Miami beach office that he later describes as having, quote, ugly blue carpets and pink walls. He shares the space with a woman named Janine St. Louis, who runs a beauty company called Your Own Personal Best. Janine is also David's girlfriend and soon-to-be wife.

But the most important woman in David's life might actually be someone else, Cheryl Sammons. Cheryl originally worked with David to manage Gerald's office in her hometown of Charlotte, North Carolina. But David quickly saw her talent and drive and recruited her to be his nationwide deputy. She's skeptical at first, but agrees to move to Florida and become the operations manager for the new firm. Cheryl is one of two crucial assets David brings with him from Gerald's firm—

The second is years of relationship building with the banks that make up Gerald's clientele. When these banks had problems at any of Gerald's branches, David was the one who helped solve them. So once he sets out on his own, David is well-positioned to take some of Gerald's business. And he starts with two of the most important names in housing.

Turns out, David couldn't have picked a better time to get into foreclosure law. Years of deregulation have made the housing market a playground for fraud. As early as the mid-1990s, there's been a dramatic increase in subprime mortgages, which allow people with bad credit to take out home loans in exchange for higher, often predatory, interest rates. And with more sketchy loans comes more foreclosures.

Now, in theory, it should be hard to foreclose on someone's house. You have to prove a lot of things, like that the homeowner didn't pay their mortgage and that the bank notified the homeowner that they're in default and that the bank actually owns a mortgage. It's a lot of paperwork to file.

Most of the time, lawyers bill by the hour. In a later deposition, David claims that foreclosures should take a minimum of 90 minutes, assuming the employees have done their due diligence. But in the emerging field of foreclosure law, firms bill a base fee of $1,000 for every foreclosure they process, plus hundreds of dollars tacked on for all kinds of additional services. If you're willing to be sloppy, you can bill huge sums for very little work.

That means it's in the firm's best interest to push through as many foreclosures as possible as quickly as possible. David's old boss, Gerald, claims to be a pioneer in this space. He says he invented the model of processing foreclosures with a flat fee.

The vast majority of mortgages in America go through Fannie Mae and Freddie Mac. These are companies that are partly backed by the federal government, and their explicit goal is to increase the number of Americans who own homes. So they buy up a ton of loans. That way, the lenders that originally made those loans are guaranteed to get their money back, even if the homeowners default.

This, in turn, makes the banks more willing to give out mortgage loans. It's all very complicated, which actually works in David's favor. His clients are the banks taking people's houses. And the less the average person understands about why the bank is taking their home, the fewer questions they'll ask. I mean, Sarah, how many scams have we talked about that happened just because people are afraid to ask questions? Of course. You see official paperwork and you're not going to question it. You're panicking because you think you did something wrong.

Yeah. A Florida lawyer later tells the Palm Beach Post that David's early business strategy is to schmooze with clients. He takes them on lavish trips and gives them rides on yachts. We don't know for sure if Fannie and Freddie get this treatment, but it sure seems like they like him. In April of 1996, just over two years after David started his own firm, Fannie Mae makes him a part of their exclusive attorney network.

It basically means that they're recommending his services to lenders pursuing foreclosures on Fannie-backed loans. It's the golden ticket to a lot of business with very little oversight. In fact, David has so much going on that he needs to hire more employees to process all the foreclosures and a bigger space. The firm moves twice in just a couple of years and ends up in a strip mall and plantation about a half hour drive from Miami.

By now, his firm is handling an estimated 15% of all foreclosures in Florida. And in 1998, Fannie names David its attorney of the year. David is on top of the world, but thousands of people are getting screwed in the process. And they're about to have an advocate where it counts, in court. It's March 1999, and Claude Walker enters the strip mall office of David's firm, where

Claude has receding hair and glasses. He's a lawyer, but he isn't here looking for work. He's here to take depositions from David's employees. Claude is heading a class action lawsuit. It alleges that David's firm has overcharged homeowners for attorney's fees, research, and even postage. It also accuses David of invoicing for outside procedures that are actually done in-house.

Claude faces an uphill battle with the case because David's scam is just so complex. Back when Claude initially filed the class action, a judge compared the rampant overbilling to, quote, something out of John Grisham's novel, The Firm, where someone in the law firm is doing something wrong, but no one can quite seem to solve the mystery of how it works. ♪

It doesn't seem promising that the judge who has to adjudicate this case needs to compare it to a John Grisham novel to understand it. And when Claude walks into David's office, he sees part of the answer to the mystery. He later describes it as a warehouse with lawyers crammed in like, quote, hamsters in a cage. All of them are under intense pressure to maximize foreclosures and profits.

By now, David is too busy managing relationships with big clients to be involved in any of the legal practice at all. So it falls on all of these employees to do whatever they can to increase profit margins. David ultimately settles the class action lawsuit, agreeing to pay $2.1 million to homeowners. That seems like a lot of money, but it's split between thousands of plaintiffs. Claude later describes the settlement as chicken feed.

Claude has seen how David pushes his employees to process as many foreclosures as possible. But he has no idea how bad things are for anyone unlucky enough to work at the law offices of David J. Stern.

In July 1999, four months after Claude's visit, David gets hit with another lawsuit. This one is filed by a former paralegal named Bridget Balboni. And this time, the lawsuit isn't about David's shady business practices. It's about the office culture he created. By all accounts, David's management style seems to be work hard, party harder.

He lavishes gifts on people willing to do his dirty work, and he throws Wolf of Wall Street-style bacchanals, where he reportedly loves to show up in costume, including one time going on stage dressed as Michael Jackson. Rich people are always throwing these big, dumb...

costume parties. I don't know why. It seems like there's always a photo that resurfaces from one of these costume parties that ends up being bad. I don't know if that's what's going to happen here, but I have Bad News Bear vibes about it. Yeah, definitely bad news here. Bridget was at David's firm for two years, and she says that during her time there, she endured constant sexual harassment from David.

Bridget alleges that David regularly sticks his fingers in his employees' pantyhose and pushes his tongue in their ears, that he consistently grabs women from behind and simulates intercourse. Bridget claims that David offered to pay for motel rooms for her and several other employees on a trip to Key West if she agreed to sleep with him. Other women also allege similar behavior by David.

David eventually settles with Bridget for an undisclosed sum. He hasn't commented publicly on these allegations, but during a deposition years later, he claims to have won the lawsuit. And in that same deposition, we get some insight into his opinion of women in the workplace. He's asked about the most important things he's learned working for Gerald. And he answers, quote, Well, I was single at the time, so there was this secretary. ♪

David has made it clear how much he respects the women who work for him. And he's about to show the same level of disdain for Florida's highest court. In October 2002, the Florida Supreme Court formally reprimands David for the unethical behavior alleged in Claude's lawsuit. They really bring the hammer down to make sure David learns his lesson. He's ordered to pay back the cost accrued by the Florida Bar Association.

$750. That's it? $750? I mean, obviously, this does nothing to deter David.

Whistleblowers try to tell Fannie and Freddie about the foreclosure fraud, but they don't seem to care. So as the housing bubble grows, David just keeps making more money. In 2006 alone, his firm handles 15,000 foreclosures and brings in over $40 million in revenue. And as the profits ramp up, so does the fraud.

In later depositions, former employees describe the office's transformation into a full-on assembly line. They need so many warm bodies to deal with all the paperwork that there are near weekly orientations for new employees. Sure, many of these people don't really know what they're doing, but it's not a problem. If a document goes missing or doesn't get filed in time, they simply create a new one and backdate it. Other times, they doctor paperwork after it's already been filed. ♪

So are these people, like, unaware that they're doing something that's scammy and they've just been trained poorly and they don't know what they're doing? Or are they, is this the point? Is this the scam? It's a little bit of both. It seems like some of them do know and some of them don't know, but that seems to be a part of the scam. And lots of these documents are supposed to be notarized, but there are only a couple of licensed notaries at the firm. So whoever is around just takes a stamp and forges the accompanying signature. And then they're

No one is ever asked to actually read any of the documents. And a lot of this depends on the compliance of one person, Cheryl. Cheryl is a firm's operation manager, the one who David poached from Gerald's firm. But that's not her only job. She's also a notary whose stamps are used on tons of fraudulent affidavits.

She's taking on a lot of additional legal risk, which is probably why, even though she and David get into constant screaming matches, he still pays her mortgage, her phone bill, and reportedly buys her a new BMW every year. They apparently even go on vacations together. For what it's worth, in a deposition, David takes pains to insist that the BMWs were short-term leases.

So David is arguing that simply leasing the car is better than purchasing it. Yeah. He was kind of like, excuse me, no, I was not buying her cars. They were short-term leases. There's a huge difference. Game changer. Game changer.

And of course, David isn't getting his hands dirty. In the same deposition, he says that by 2006, he's no longer involved in the day-to-day operations of the firm beyond maintaining relationships with clients. He and Janine are too busy living the high life. They've bought two houses in Beaver Creek, Colorado for a combined $19 million. That's in addition to their main house, a mansion on a private island in Fort Lauderdale with its own security force. ♪

David also builds out a luxury car collection, starting with a Bugatti. But things are only good for David and Janine because they're so bad for everyone else. When the bottom finally drops out of the housing market, David will find himself at the center of a national crisis. ♪

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Just use the code SCAMPOD. That's happymammoth.com, M-A-M-M-O-T-H, with the code SCAMPOD to get 15% off your entire first order. It's February 2007, and Lisa Epstein is nervous about signing her mortgage paperwork.

Lisa is a cancer nurse with long brown hair that she usually keeps tied up in a colorful scarf. She's about to have a baby, and her husband thinks their family needs a bigger space than the fifth-floor condo they've been living in. They have their sights set on a one-story house in West Palm Beach.

It has yellow walls, a tiled roof, and a ton of room for a growing family. Lisa's a little nervous about the price tag, but she hopes that selling the condo will help cover the mortgage on the new place. So she signs. But the months drag on, and no one wants to buy her condo. At some point, her husband loses his job. So now Lisa's paying off two properties on a nurse's salary.

She tries to restructure her loan, but every time she calls her bank, she gets the runaround. No one will give her any concrete advice, and the hints they do give are often contradictory. One person claims that the bank doesn't even have the authority to restructure the loan and says Lisa has to call a different bank for that. In his book, Chain of Title, How Three Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud, Jurgens

journalist David Dayen interviews Lisa about her desperate search for information. In it, she says that a representative all but tells her that the only way she can get the bank's attention is to stop paying her mortgage altogether. If she doesn't pay for three months, she'll technically be in default. And if she defaults, then the bank will have to help her refinance so they can get their money back. This is so fucked up. I cannot believe...

We have built society like this. It's just so antagonistic. Like, the only way for you to get the bank's attention is if you default on your loan? That sucks. Yeah, I mean, America's kind of a failed state, low-key. Oh, it's so brutal here. Well, Lisa hates the idea, but nothing else has worked.

So she reluctantly stops paying. After three months go by, she does hear from the bank when they show up to her door. They're here to tell her that her house is being foreclosed on. But the papers don't name her bank or even the other bank she was told to call. They name a third bank as the owner of the house. Man, this would send me into a tailspin. This is so confusing. And confusing by design, right? Mm.

While Lisa tries to figure out what the hell happened, but no one will give her a straight answer. Like millions of other Americans around this time, she's about to lose her house. But unlike most of those people, Lisa is determined to get to the bottom of this. Luckily, the hospital where she works is a 12-minute walk from the Palm Beach County Courthouse.

So she starts going there every day on her lunch break. She starts attending foreclosure proceedings, and she is horrified by what she sees. Florida is so overrun with foreclosures that lawyers start referring to the court as the rocket docket. And even though every single case determines whether or not someone is going to lose their home, the judges want to keep things moving as quickly as possible, just like David and his army of lawyers.

Lisa learns that it's not uncommon for a judge to rule after literally 20 seconds. We don't have audio of David or these court proceedings, but the movie 99 Homes, which is inspired by Florida's foreclosure crisis, depicts a similar situation. In this scene, Andrew Garfield's character is a homeowner looking for answers, just like Lisa. ♪

After months of watching these hearings, Lisa notices something. A lot of the time, banks can't actually prove they own the houses they're trying to take. Often, lawyers will say they've lost one or more of the relevant documents.

Sometimes they'll submit affidavits that supposedly confirm ownership, but Lisa can see that no one actually takes the time to read them. And because the defendants are working people overwhelmed by the legal system, they usually don't have the tools to fight back.

Lisa is furious. She keeps digging. And in the process, she meets other people like her, people struggling to understand the system and fighting to keep their homes. They start sharing notes. They're digging into the center of the rotten foreclosure process. And what they find is both infuriating and expected. Lawyers and bankers have found even more ways to turn foreclosures into cash.

It's early 2010, and David has moved his firm into a beautiful six-story building overlooking a lawn of perfectly manicured grass.

His firm alone handled more than 70,000 foreclosures over the past year, and now they've started a new company. It's called David J. Stern Processing, or DJSP. It handles lots of the more administrative parts of foreclosures that don't involve actually being in a courtroom or making legal arguments. It's also publicly traded. And since the foreclosure crisis keeps on snowballing, DJSP looks like a pretty good investment.

Publicly traded foreclosure. There has never been a more American sentence than that. It is bleak, my friend. And even more bleak, the strategy works like gangbusters. When the company goes public, David personally makes off with more than $55 million in cash. He uses the windfall to buy his neighbor's house, bulldoze it, and put a tennis court in its place. But

But a few months later, in March of 2010, David heads to Southern California for a conference hosted by an investment bank.

It's a pretty fancy event at a Ritz-Carlton featuring performances from culturally relevant icons like Billy Idol. This should be a great opportunity for David to raise money. But when he presents DJSP to potential investors, they seem nervous. Probably because the Obama administration has made some small efforts toward reducing mortgage debt. And if this debt gets canceled, then the bank's pushing foreclosures will be left holding the bag.

David tells them not to worry. He predicts that foreclosures will remain at high levels for at least another seven years. He assures the potential investors that no matter what the Obama administration does, DJSP will find a, quote, profit center. But while David's looking upstream at fancy investors, he's about to get his comeuppance from the people he's used to walking all over.

Around the same time as David's conference at the Ritz-Carlton, Lisa is at an outdoor tiki bar in West Palm Beach. It looks kind of like an adult rainforest cafe. Lisa helped organize this get-together, which becomes known as Foreclosure Fraud Happy Hour. It's where homeowners, sympathetic lawyers, and other interested parties come together to commiserate, share their findings, and make a plan to take down the banks.

The happy hours build on a loose network of blogs, workshops, and whispers trying to pin down all of the fraud happening in foreclosures. It's ambitious and has taken some nudging to get along. The only reason lawyers showed up at the first one was because Lisa promised that she would bring a bunch of single nurses.

And as the community forms, the attendees link up with other people across the country who have been documenting fraud in the housing market. And Lisa is making inroads with local leaders. She's even connected with some junior lawyers in the Florida Attorney General's office who want to help investigate the fraud. Eventually, Lisa and the rest of her community start getting results.

They uncover evidence of law firms backdating and making up documents, not just David's firm, but at firms all across the country. They also notice that these documents are signed by more or less the same group of people. And the sheer volume of foreclosures suggest that if these people were really signing these documents themselves, they'd be going through hundreds of affidavits a day, too many for anyone to actually be reading them.

Lisa is building connections, and not just between lonely lawyers and single nurses. They're creating a community, one that's about to put the spotlight back on David's firm. Among the regular attendees at Foreclosure Fraud Happy Hour is another attorney named Thomas Ice. Thomas tells them something big,

He says he's already deposed Cheryl Sammons. She's David's office manager who vacations with him in between quote-unquote signing some of the fake documents. In the deposition, Thomas confronted Cheryl with some of the backdated documents. He got her personal attorney to admit on the record that they were fraudulent. Here's CNN's Drew Griffin reading from Cheryl's deposition. How much time do you spend examining each document before you sign them? She says very little.

Question, do you read the document? Answer, no.

I'm always blown away when people don't do the one thing that their whole job is. Like, your only job is to read the documents before you sign them. That's what you have to do here. They can't even do that? No, it's too much work. I see. But it is a huge win for Thomas, Lisa, and the rest of the lawyers and investigators. They post the text of the deposition on their blog, and the post gets some serious traction. They're also the first to write a letter to the law firm.

Employees of David's firm start anonymously reaching out to let the lawyers and investigators know that they're on the right track.

And these employees aren't just talking to Lisa and her friends. They're reaching out to journalists who are doing their own deep dives into David. One of these journalists is Andy Kroll. After months of reporting, he publishes a feature in Mother Jones. It paints a damning picture of David's law firm. It lays out the broad strokes of his fraud, including legal documents that explain the process behind his fakes.

He also reports on Bridget's lawsuit and speaks to David's former employees, who describe him as a pig. Less than a week after the story is published, Florida's attorney general launches an investigation into David's firm along with three other so-called foreclosure mills. Then, the New York Times publishes a story that names David as one of the focal points of the ongoing crisis.

This story also publicizes a rumor about David, that he'd been planning to name his yacht Tsukasa Es Mikasa, and that the only reason he didn't is because his wife said it was a bad look. There should be a jail just for being lame. Lame and evil. Yeah, you should go to lame and evil jail, a specific jail for people who are evil and the way they do it is lame. Yeah, he does not have the sauce. No.

While faced with national public scrutiny for the first time in his career, David denies that he's engaged in any fraudulent behavior. Instead, he insists that he's simply running a, quote, efficient law firm. He tells the New York Times, David insists he's just being misunderstood. Maybe that's why he literally ends up naming his yacht Misunderstood—

But his misdeeds are coming back to haunt him. And the final straw will come from yet another mistreated employee. A few weeks after the New York Times story runs, a former paralegal at David's firm is deposed by the Florida AG's office. And she explains that the paralegals at the firm don't even prepare the documents describing the foreclosure cases. Those are all written at offshore facilities in Guam and the Philippines and then signed by American employees.

David has continued overcharging clients by claiming to have served papers to non-existent partners and family members. Often, the firm doesn't even serve the real homeowners. They just throw the papers in the gutter. In some cases, judges expect the firm to run background checks to see whether the foreclosure victims were in the military. And this paralegal said she drew the line at fabricating documents about the troops. That's when she quit.

What if you're not a troop? Is it okay? Sachi, remember, this is Florida in America. Yeah, sorry, sorry, sorry. This is the most American story we've ever done. Yes.

She also says that the assembly line of fraud is right outside of David's office. There's no way he could deny knowledge of it. And she says that David hasn't just been working to maximize Fannie Mae's earnings, he's been deceiving them too. Whenever they knew that Fannie Mae auditors were coming for an inspection, David's employees would spend all night altering documents in order to hide their fraud. And the next morning, they'd get all dressed up to greet the auditors.

This paralegal's deposition has everything the government needs to take David down. But lawyers in the AG's office are concerned that the case will move too slowly and that David won't actually face consequences. So they leak the deposition. Under pressure from Congress and the media, Fannie and Freddie finally drop David and send employees to remove foreclosure files from his office.

But it's not because they want to put an end to the foreclosure crisis. It's actually the opposite. They want it to continue at all costs.

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By October of 2010, the widespread fraud in the housing system has become impossible to deny. Lisa watches intently as the national media finally starts paying attention to the crisis. People learn about how the major banks have all been robo-signing their documents. They call it that because the law firms they work with process forms so quickly that it's almost like they're robots.

The attorneys general of all 50 states announced investigations into foreclosure fraud, and banks are forced to suspend foreclosures. Lisa, Thomas, and the rest of their crew have been vindicated. Lisa tries to use her new public profile to call out the banks who allowed this whole mess to happen. When she's interviewed on MSNBC, she doesn't hold back. There's no mortgages backing these securities. They didn't put them in. I think we should call these malicious bankers with syphilis.

I love her. Slay. Yeah, she's been waiting to say this out loud. She wrote that in her diary and has been waiting for the opportunity, and I'm really happy for her. Lisa's hoping the government will take action. She wants innocent people to stop losing their homes and guilty people to face justice.

But then, nothing happens. At one point, President Obama holds a meeting about whether foreclosure fraud deserves a serious response. But his advisers shrug their shoulders and convince him to let it go. Lisa watches in horror as the Justice Department declines to prosecute anyone. There's a national settlement with the banks, but the victims get a tiny payout, about $2,000 each.

Lisa is obviously furious. She thinks it's a miscarriage of justice, and she's not willing to let it go. A couple of years later, she decides to run for county clerk in Palm Beach. She hopes to get direct control over all of the fraudulent records. Here she is in a campaign speech. We as citizens must shame these financial institutions. We must shame the legislators that support them to our grave peril.

Like her investigation, Lisa's campaign is righteous, but doomed. The local Democratic Party doesn't want her to run. She does anyway, but only gets 24% of the vote. Still, Lisa and her fellow investigators have done something extraordinary. Even if it was only for a moment, they halted the entire foreclosure apparatus. And they helped instigate a national reckoning, no matter how brief.

For the next few years, David is tied up in a seemingly endless stream of legal battles. They don't look good for him. His investors sue, claiming that he misrepresented the company's potential earnings. He also faces a class action racketeering lawsuit. And in January 2014, he's disbarred.

The judge who recommends his disbarment notes that David has refused to take responsibility for his actions. Instead, he blames everything on either faulty paperwork or incompetent employees. The judge writes that, quote, So David does what many of his victims try to do, sort of. He sells one of his houses, the one on a private island.

And while he gets less than he wanted, he still makes a small fortune, $27.5 million. I'm terrified to think of what amount of money he actually wanted for this. Yeah, modest sum.

And over the next few years, David mostly keeps quiet, popping up every now and then to sell something juicy, like his yacht or his condo in Miami. In 2019, he takes a $500,000 loss on the sale of one of his houses. It's chump change to him, but more than the value of many of the homes he helps steal from ordinary people. And he does find a new line of work. Rather than practicing law, he invests in a series of Five Guys franchises.

To this day, David has never faced any prison time and he's never admitted to doing anything wrong. And while he was disbarred, the banks have simply passed his cases on to other firms. They'll continue to foreclose on as many people as they can, just under someone else's letterhead. ♪

Sachi, once again, the scam is kind of a system here. There's a glimmer of hope and then you realize, wait a second, things don't actually change.

I feel like this is a scam that, like, really survives on the fact that people don't understand paperwork. I don't. Yeah. But I think this highlights, like, other stories have, how there is so much room for corruption in the legal system. And how not only is there room, but people are rewarded for it. Like, David won awards and was...

you know, sought after to work for because of his quote-unquote efficiency and how much work he was able to do for these banks. And to me, that's just so disappointing. Yeah. So much of American business...

Yeah.

for figuring out these loopholes, which aren't really loopholes. They're just crimes and frauds and scams. But there is hope in that, you know, these people did come together. Yes, it wasn't the level of justice anyone deserved at all, not even close.

But I do think there's something good about seeing people come together collectively for like a good cause and to care about that and to not give up on it, you know? We love collective action. We love it. This is The House Hunter. I'm Sarah Hagee. And I'm Sachi Cole.

If you have a tip for us on a story that you think we should cover, please email us at scamfluencers at wondery.com. We use many sources in our research. A few that were particularly helpful were Chain of Title, How Three Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud by David Dayen.

Fannie and Freddie's Foreclosure Barons by Andy Crow for Mother Jones, and David J. Stern, The Man Behind the Crumbling Foreclosure Empire by Diane C. Laid for the Palm Beach Post. This episode referenced sexual harassment and assault. If you or someone you know has experienced sexual harassment and would like to speak with someone who is trained to help, the U.S. National Sexual Assault Hotline can be reached at 1-800-656-HOPE.

That's 1-800-656-4673. Our story editor, Eric Thurm, wrote this episode. Additional writing by us, Sachi Cole and Sarah Hagee. Our senior producer is Jen Swan. Our producer is John Reed. Our associate producers are Charlotte Miller and Lexi Peary. Our story editor and producer is Sarah Enney. Sound design is by Sam Ada.

♪♪

Our coordinating producer is Desi Blaylock. Our managing producer is Matt Gant. And our senior managing producer is Ryan Lohr. Kate Young and Olivia Richard are our series producers. Our senior story editor is Rachel B. Doyle. Our senior producer is Ginny Bloom. Our executive producers are Janine Cornelow, Stephanie Jens, Jenny Lauer Beckman, and Marshall Louie for Wondery. Wondery.

If you like Scamfluencers, you can listen to every episode early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey.