Real Estate & Property Law

Law Firm Seized; 3 Firms, 4 Lawyers, 14 Others Sued re Claimed Client Fraud in Bank Litigation

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A California law firm has been raided and shut down and four attorneys are among 18 individual defendants sued in civil litigation over a fraud allegedly perpetrated on thousands of struggling homeowners nationwide under the guise of legal representation.

The defendants are accused of working, in a combination of law firms and call centers, to persuade homeowners facing mortgage foreclosure suits to pay $5,000 to $10,000 to be named as plaintiffs in mass joinder litigation against major banks, according to the Associated Press and the Money & Company blog of the Los Angeles Times.

The defendants allegedly overstated and misrepresented the benefits that homeowners could expect to get from participating in such litigation.

Florida bar authorities are looking into the activities of at least one lawyer there concerning similar activities, the AP reports.

In a press release and press conference in San Francisco today, state Attorney General Kamala Harris announced that Philip Kramer, his law firm, Kramer & Kaslow, two other law firms and three other lawyers are among the defendants in the Los Angeles Superior Court suit.

Additionally, the Kramer firm had its assets frozen and has been placed into receivership.

Attorney Mitchell J. Stein, according to the AP article, is also among the defendants in the case. It resulted from a cooperative effort by the State Bar of California and the state Department of Justice.

The articles don’t include any comment from Kramer or Stein, and the AP said the two couldn’t be reached for comment. Calls by the ABA Journal to Kramer & Kaslow were repeatedly met with a busy signal; a message left with a woman who answered the phone at Stein’s firm did not receive an immediate response.

The websites for their law firms, however, state or imply that both had problems with unauthorized individuals misappropriating the law firms’ identities to sign up potential clients who mistakenly thought they were being represented by the actual firms operated by Kramer and Stein.

Kramer & Kaslow says in a lengthy warning page that potential clients should “beware of business entities claiming to work with Kramer & Kaslow who do not,” as well as “anybody making promises of immediate or guaranteed results.”

Nonetheless, the page continues, “we feel strongly that we have a great case against your lender, and unless the defendants win outright, we will either go all the way to trial by jury where a verdict in your favor could result in your mortgage contract being voided plus the payment to you of punitive damages, or more likely, the defendant lender will settle the case out of court from fear of losing the jury trial.”

Hoping to participate in lucrative litigation, the page continues, “a large number of companies [are] solicit[ing] people to become plaintiffs in our lawsuits, hoping to receive a referral fee or some piece of the retainer money up front. Some of these companies are sending out marketing material—including mail flyers, auto-dial phone calls, emails and phone text messages—without any notice or authorization from us. As a result of the ‘Internet buzz’ and these unauthorized mass marketing techniques, our office is receiving an incredible number of phone calls and emails every day of curious, suspicious or concerned mortgage holders.”

The site says the firm has had to send out cease-and-desist letters and even take legal action to deal with unauthorized entities that “hold themselves out as being authorized by Kramer & Kaslow, ‘associates’ of Kramer & Kaslow, and in some cases have gone so far as to use our name and trade dress in their own retainer agreements. The worst of these offenders present a retainer agreement with our name on it and ask you for cash or to wire money to an unnamed bank account, and when we get wind of it they disappear with customer’s money.”

A similar, but shorter, page on the website for Stein’s firm features a doberman pinscher and a promise that the client holds the leash. It warns potential clients that “the firm is not affiliated in any way with persons named ‘Noel,’ ‘Lauri,’ ‘Erica,’ ‘Wendy,’ ‘Stuart,’ ‘Vito’ or ‘Chris’ and such persons are not authorized to speak for the firm. We have posted this notification at the request of numerous clients of the firm.”

In a message posted on another page of the website that is dated Aug. 8, 2011 and billed as “An Open Letter to Americans,” Stein speaks at length of fighting the good fight against “the banks’ nationwide fraud” and the satisfaction of “watching many of our client, home owners, retain their homes as a result of the firm’s legal representation.”

He pledges the firm’s continued support to clients and predicts a decisive court victory despite what he describes as a “future [that] holds unmatched challenges for all of you in keeping your homesteads and in stopping the nation’s banks from completing the largest fraud in United States corporate history.”

Additional and related coverage: (Oct. 2010): “Calif. AG Sues 2 Companies, 3 Attorneys & Others for $60M, Says Homeowners Duped Into Suing Banks” “Kramer & Kaslow: California State Bar Shuts Down Rogue Law Firm”

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