Thursday, August 25, 2011

Cal. AG Tags Alleged Nat'l 'Mass Joinder Lawsuit' Racket With Civil Suit, Shuts Down Operation That Attempts To Circumvent Upfront Fee Bans, Some Say

In San Francisco, California, the Los Angeles Times reports:

  • California authorities have sued a group of lawyers and their associates, accusing them of fraudulently taking millions of dollars from thousands of homeowners by deceiving them into thinking they would receive relief on their troubled home loans.

  • Atty. Gen. Kamala D. Harris said Thursday(1) that the California Department of Justice, in conjunction with the State Bar of California, sued Philip Kramer of Calabasas, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers and 14 non-lawyers.

  • The defendants are accused of working to defraud homeowners across the country by deceptively marketing "mass joinder" lawsuits, which have hundreds or more individually named plaintiffs.

  • At a news conference, Harris said the state would seek "fines, penalties, damages and restitution in potentially the tens of millions of dollars." She said the lawyers' assets had been frozen.

For the story, see Alleged foreclosure-prevention scam shut down by California.

For the lawsuit, see People v. The Law Offices of Kramer and Kaslow, et al.(2)

(1) See California AG press release: Attorney General Kamala D. Harris Sues Law Firms Engaged in National "Mass Joinder" Mortgage Fraud:

  • The legal actions were designed to shut down a scheme operated by attorneys and their marketing partners, in which defendants used false and misleading representations to induce thousands of homeowners into joining the mass joinder lawsuits against their mortgage lenders.


  • "The number of lawyers who have tried to take advantage of distressed homeowners in these tough economic times is nothing short of shocking," said State Bar President William Hebert. "By taking over the practices of four attorneys accused of fraudulent marketing practices, the State Bar can put a stop to their deplorable conduct as part of our ongoing effort to protect the public."

    It is believed that at least two million pieces of mail were sent out by defendants to victims in at least 17 states. Defendants' revenue from this scam is estimated to be in the millions of dollars.

    Defendants unlawfully paid commissions to their sales representatives on a per client sign-up basis, a practice known as "running and capping."

    The State Bar has seized the practices and attorney accounts of the attorney defendants: The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.

    Attorney General Harris is challenging the defendants' alleged misconduct in marketing their mass joinder lawsuits; her office takes no position as to the legal merits of any claims asserted in the mass joinder lawsuits filed by defendants.

    Victims in the following states are known to have received these mailers, or signed on to join the case. This is a preliminary list that may be updated: Alaska, Arizona, California, Colorado, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Texas, Washington.

(2) For the related court filings, etc., see:

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