Two indicted in 'massive' Nevada robo-signing case

Two employees of a mortgage servicing firm have been accused of involvement in a massive robo-signing scheme in Nevada.

NEW YORK (CNNMoney) -- A Nevada grand jury has indicted two people allegedly involved in a "massive" robo-signing scheme, the state's attorney general said Thursday.

A spokeswoman for Attorney General Catherine Cortez Masto said she believed the indictments represent the first criminal charges filed in association with robo-signing, or the falsification of foreclosure documents.

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Foreclosure Fiasco

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Robo-signing is believed to have been responsible for thousands of wrongful foreclosures nationwide in the past few years.

According to the attorney general's office, two California residents, Gary Trafford and Gerri Sheppard, face dozens of charges for allegedly supervising the falsification of thousands of foreclosure documents in Nevada between 2005 and 2008, as the housing bubble hit its peak.

Trafford and Sheppard worked during that period for mortgage servicing firm Lender Processing Services (LPS). LPS has also been subpoenaed by attorneys general in California and Illinois in connection with alleged robo-signing.

"The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents," Nevada Deputy Attorney General John Kelleher said in a statement.

A defense lawyer in the case did not immediately return calls seeking comment.

Lender Processing Services processes loans for more than 50% of all U.S. mortgages, the Illinois attorney general's office said in May.

In a statement issued Thursday, LPS, which said it has more than 8,000 employees, acknowledged that the signing procedures on some of its mortgage documents were "flawed." But it added that its documents were "properly authorized" and did not result in any wrongful foreclosures.

The spokeswoman for the Nevada attorney general declined to comment on whether there were any plans to expand the investigation or seek more indictments.