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27 May 2011


D. King

No wonder Nevada City can’t find four thousand bucks for the Constitution Day Parade. :(

Russ Steele

George you wrote:

"To date the Diaz case appears to have all the elements of a cover-up, incompetence, or even a cover-up of incompetence."

I am voting for "a cover-up of incompetence." The issue then is how wide spread is the incompetence, at what levels, and what is really being covered up? I am growing more and more concerned about the lack of leadership at the BOS level. This mess could have been solved long ago if they had demanded that Diaz admit his mistakes and seek restitution with AtPac. But, it appears some big egos and a bad case of political correctness got in the way of effective leadership.

bill Tozer

The server has been scrubbed. Fact. But, where are the e-mails between county personnel working on the project and the e-mails between county personnel and AtPac. Don't tell me those e-mails are not available. Even in the private sector, an employer as large as the county has to keep records of all e-mails by law. Or did Congress exempt the public sector from its regulations as well? Don't even try to tell me all e-mails were put on the server and scrubbed. I might have been born at night, but not last night.

Paul Emery

1.2 mil for lawyers all from discretionary funds. I wonder what jobs or services are going to be cut to pay for this.

John Galt

The Supervisors can spend $1.2 million for attorneys to defend an out of state firm, but not $15,000 for the ERC that has helped improve the economy for our County,
nor funds to sustain the excellent 4-H programs of our youth...etc.?

The Supervisors have unusual priorities.

Confirmed by Scofield's remark in The Union that a $1Million settlement with AtPac was on the table...after he voted to approve a $1.2 million for legal defense costs.

Why not save the $200,000 (and a few County jobs) and settle the matter?

Barry Pruett

On May 25th, California Attorney General Kamala Harris subpoenaed the behemoth foreclosure-processing firm Lender Processing Services (LPS is the parent company of Aptitude Solutions) as part of an ongoing probe into home repossession practices in the Golden State.

LPS was at the center of the so-called robo-signing scandal last year, in which banks employed people to sign documents used in foreclosures. Single individuals per day signed thousands of such documents, with the employees many times not even reading or understanding the documents they were signing.

60 Minutes did a report on LPS in April.


I have been giving this a lot of thought this week and did some research online on LPS and Aptitude Solutions and foreclosure fraud. LPS processes foreclosures for a majority of the top 50 banks in the nation. Aptitude Solutions does recording software and court management software. Why is Aptitude (a subsidiary of LPS) so deteremined to get into the CA market? Nevada County, Placer County, and now San Diego County. Is it to streamline foreclosures in a state with super high foreclosure rates by having direct access to the CA counties' public records?

LPS is accused "robo-signing" documents and also of forging mortgage assignments through another subsidiary in Georgia called DOCX. Sometimes when banks buy mortgages the assignments do not get done...LPS comes in and "fixes" the problem.

Isn't there a conflict of interests in being the custodian of public records and "filling in the recording gaps" as mortgages are sold on the market and the assignments do not get done? Talk about letting the fox into the hen house...a division of LPS who processes “fraudulent” loan foreclosures being given direct access to land records at a county recorders office and local courts.

D. King

Barry (got your name right this time)

My research led me to Florida, but, stopped because it was eye bleedingly boring. Your findings do not surprise me. I followed the people and not the companies. Lots of links to, IMHO, weird and circular associations. Ho hum!

John Galt

To your point Barry, Aptitude Solutions contract has some rigid and strong language regarding its ownership of its system (including--quite ironically--its intellectual property rights.) Such rights could help mask some of the functions of their system that might serve the goal of their parent company (LPS).

Todd Juvinall

I give old Paul Emery a lot of credit for standing up to the wailing's of Pelline etal and for that he has my respect. Allowing George to speak on KVMR has made Paul a target. We all have fun jousting here but in the end, free speech is being protected by Paul. Thanks man.

Barry Pruett

Our portly leftwing blogger has alienated most of the County since he arrived from the Bay Area. Any goodwill that he had when he was let go from The Union has long since dissipated. The fact of the matter is that KVMR, KNCO, and The Union are great media outlets for our local community. To say that KVMR caters to the right in our community is about as absurd as it gets.

Robert Lou

Barry, with you being a lawyer doesn't the plaintiff have to show some kind of damage or loss from this action occurring?

Otherwise wouldn't this get tossed out of court?

Barry Pruett

Not necessarily. There are multiple remedies available in court to plaintiffs in general and "damages" are only one of them. In court, damages could include compensatory damages, punitive damages, incidental damages, and liquidated damages. Other types of relief could include specific performance, injunctions, restitution, and account of profits. So, it depends on what is being asked for. You would have to go read a plaintiff's complaint and see what relief they seek.

George Rebane

Russ Steele of NCMW emailed me the expected response from the FUE’s blog. In it that he predictably misrepresents and/or misses the import of what is happening is to be expected. Part of this may be laid up to poor reading skills – e.g. direct misquote “deflating inquiries” – but, more importantly and in the main, it is his poor understanding of the matter that could lead readers astray.

- The county has revealed no information to warrant that the E&O insurance company will cover cent one of the million plus legal defense costs. This especially if the judgment goes against Nevada County or Mr Diaz, and most certainly if a pre-trial settlement is reached in which the county tacitly acknowledges guilt, and subsequently pays AtPac some unspecified damages in addition to covering its own legal expenses. The insurance company already protected itself by sending the county a ‘Reservation of Rights’ memorandum that specifies its liability limitations in view of the illegalities alleged in the suit. The contents of this memorandum, and therefore understanding the scope and extent of potential county liabilities is not revealed to the public under the general blanket of confidentiality that is in effect. There is no evidence that the insurance company will provide any coverage let alone “for most of the claims” under the county’s current policy.
- FUE does not understand the nature and dimension of harm that comes from unauthorized revelation of one’s IP (intellectual property), especially IP of a technical nature such as processes, data handling flows, and algorithms embedded deep in large software systems. Nevertheless, the courts have long understood that such harm comes over time and surreptitiously with no obvious red flag to call attention that the aggrieved party suffered future loss of business in a competitive environment. That is one reason why in America small companies with protected IP can be launched and grow into industry leaders.
- Re confidentiality: The need and practice of confidentiality between two contending private parties is easily understood. However, when one of the parties is a public entity like a county government, then different obligations and rules of behavior are called for. The individuals who will suffer damage in this case are the county taxpayers. It is easy, except perhaps for the most dense or ideologically blindered, to comprehend that in such lawsuits the taxpayers’ interests are not aligned with those of either their elected officials or the county’s staff. It is for that reason that a more open disclosure policy is proper in such cases. Of course, the history of public agencies taking heat in these kinds of proceedings is clear – they will invoke the ‘duck and cover’ game to the maximum, citing convention, ‘common practice’, and even non-existent strategic purpose for circling their wagons. As taxpayers we want to be informed about the details of who knew/did what when in our county. It is this information that we need before we next enter the voting booths.
- KVMR and balance: To my knowledge, I am the ONLY conservative commentator on that radio station which is widely known as being a progressive voice of our community. As a matter of practice, save for my commentary, the station solicits no equivalent rebuttals or opposite views of its ongoing liberal programming. On this 24/7 broadcast outlet, my views consume less than 0.0002 of its on-air time. Nevertheless, the Rebanes believe in KVMR’s community mission and service, and we support the station through our contributions. (I’m sure that RR reader, discussant, and KVMR News Director Paul Emery will correct anything I may have mis-stated here.)

Paul Emery

Thanks Todd

D. King

I see this whole thing as an ideological data mining operation.

Russ Steele

I have been busy today and could not get back the FUE's rant on George's Commentary until this evening. First, George is not a KVMR news reporter as claimed by the FUE. He writes and records a commentary! As, Paul points out The FUE is most welcome to come and post an opposing view on KVMR -- Diaz and County did nothing wrong and if they did do some thing wrong the insurance will pay the damaged, because the County Attorney hold him so. That should make for a stunning fact filled commentary. George has commented on the insurance issue, I want to focus on some misinformation in the vaunted County Attorney's statement that does not jib with the time line of events that Barry posted here.

The County Attorney writes:
The Recorder’s Office was then faced with the task of how to extract its data from the old program in order to put it into Aptitude’s program. The County requested of AtPac if they would assist in the extraction; their response did not give any assurance that the process could be accomplished in the time that the transition needed to occur. The Clerk-Recorder could not allow the performance of his official duties relative to the County’s Official records to be compromised. Aptitude Solutions, Inc. agreed to assist in the extraction.

According to the depositions, Aptitude Solutions has access to the AtPac's Intellectual property long before the Clerk-Recorder asked for their support.

October 31, 2008 – Gregory Diaz authorized the creation of a login “isphydoux” to AtPac’s software for Aptitude Solutions. Such login gave Aptitude Solutions full and unfettered access to AtPac’s software. The login was authorized by Nevada County Security Protocol 102 (“NCSP-102”) which was signed by Gregory Diaz. (NCSP-102)

November 4, 2008 – Nevada County creates a login “isphydoux” for Aptitude Solutions. (Dan Evers Notes)

November 5, 2008 – After traveling from Florida, Tom McGrath, VP of Development for Aptitude Solutions and Patty Sandever, account manager in California, are allowed full-access to AtPac’s software. They are placed in a locked room in the IT Department with no windows with (1) AtPac’s software, (2) an Aptitude Solutions server (“AS-Nevada”), and (3) a copying program provided by Nevada County. They are in the room for over eight hours. Steve Monaghan is informed of this occurrence. (Dan Evers Deposition)

November 6, 2008 - Nevada County's Information and General Services Department published the scoring results of the companies that responded to Nevada County’s RFP.

November 18, 2008 - The Nevada County BOS voted 5-0 to approve a resolution authorizing execution of a Software License Agreement with Aptitude Solutions, Inc. for a new Recorder System in the County-Clerk Recorder's office for a total amount of $229,428.

December 5, 2008 – AtPac offers to extract the data for Nevada County at a rate of $135 per hour with a maximum contract amount of $15,000. Such work is scheduled to begin on January 1, 2009. (Contract)

January 7, 2009 – Nevada County abruptly cancels negotiations of the AtPac migration of the data. Gregory Diaz assures AtPac that Nevada County will be extracting the County’s official records and Clerk records data from AtPac’s CRiis system data file, without asking for AtPac’s definition or schema information. (Diaz Letter)

You see, there was not need for the AtPac Contract, Aptitude Solutions already has the data, now all that Diaz had to do was pretend that the County was going to supply the needed data Aptitude Solutions, who started covering their legal butts with an Indemnification Agreement.

January 13, 2009 – Nevada County BOS ratifies the Indemnification Agreement with Aptitude Solutions, Inc. covering extraction and migration of County data for a data system conversion in the County

Gregory Diaz explained that Nevada County will be extracting the County’s official records and Clerk records data from AtPac’s CRiis system data file, without asking for AtPac’s definition or schema information. Nevada County has no intention of utilizing, saving, or preserving AtPac’s tables in their current format for future use. Aptitude Solutions will then be allowed to work with the extracted flat files to perform the data conversion, and Aptitude will not be using, saving, or preserving table or schema from AtPac. Mr. Robert Shulman, County Counsel, was satisfied with the need for the Clerk-Recorder’s office to enter into an Indemnification Agreement, and the County could defend any challenge by AtPac.

Now Diaz start building the cover up that Aptitude Solutions had access to AtPac's Intellectual Property, even before the contract to Aptitude Solutions was approved by the BOS.

June 2009 – Aptitude Solutions conducts multi-day secured file transfer protocol sessions between AS-Nevada and AtPac’s software which lasted for five days. The only way to determine what Aptitude Solutions copied is to complete a forensic analysis of AS-Nevada. (Kathy Barale & Dan Evers Deposition)

Remember this is the server that "got scrubbed" to military security standards, on February 19, 2010, the day after the AtPac filed the suit on February 18, 2010.

February 19, 2010 - County Counsel instructs employees to preserve evidence. Later that same day, Kathy Barale discusses with an Aptitude employee scrubbing the Aptitude server.  (Court Order, April 13, 2011)

I am not a judge, but this looks like this “scrubbing” was an action take to insure no forensic analysis could ever be done. I also find it strange that Aptitude Solutions lost all the e-mail when their server crashed. Who would want to do business with a company that does not keep a back up e-mail server? I guess Nevada County.

This sad story goes on and on. The point I am making is that the County Council is not being honest with the citizens of Nevada County. His statement, which the FUE is hanging his hat, is inconsistent with the facts taken in deposition. I have serious doubts that the FUE has even read, or if he read it fails to understand the implications of the time line of evidence taken under deposition. I hope the County Attorney took the time to read the evidence, but you would never know it from his statement.

Todd Juvinall

Barry and George, here is the link to the 1999-2000 Grand Jury Report on the Assessor's office. Arthur Green beat me in the election but after all this he resigngned. As you can see the Gang of Four were in charge then. Seelmeyer at the Union was given the info about Green and the computer system and his corruption prior to the election. Sounds like a bit of yours Barry. Read both reports. At least Jeff Ackerman is doing stories. You can see how much Art swiped.

Todd Juvinall

Barry the leftwingnut Cutter has now supposedly read the above Grand Jury Report and reading his conclusions all I can say is the guy must be a moron. I should call the Sheriff to check on him. He even sent a link of my comments to the old Assessor Art Green (who submitted his resignation for the day he submitted it) thinking my repeating the GJ report is some sort of slander! The liberal brain has got to be missing some important strands like the ones for common sense. This Cutter fellow/girl? is quite a nut (meth?). Anyway, the issue was the software the county had to discard for over a million bucks. Just like ATpac.

Dixon Cruickshank

Paul my congrats to you as well - I'm sure you've taken some serious heat about our friend George - I admire your standing tall in these times of folding to the PC crowd. I still think some of your stances are goofy but that's beside the point.

I said a very long time ago - this was going to get very smelly before it was over. Boy was I right, even more than I could have imagined, and the FUE, as I haven't even read his stuff, will go down with the ship.

I also stated that the insurance is what it is - Errors and Omissions - it does include blatent legal disregard

The time lines in this are just not able to be defended by any rational thought process - my guess at this point is AtPac's legal fee's are close to the county's and that 1 mill settlement may not be there anymore after the damning Depo's 1.2+ - 1.2+ and the settlement maybe 2M+ - just say'in

I will also agree that at some point they will settle and unfortunately as George stated NOTHING will ever be released and all the county employee's will save their pensions- Diaz will probably even stay on as recorder, for awhile at least - didn't he come from SF with the FUE ???

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