August 18, 2011

Attorney General Kamela Harris has taken action and shut down three law firms and fourteen other defendants, selling fraudulent Mass Joinder Lawsuits yesterday. The accused are being sued for fraudulently taking millions of dollars from homeowners, who were led to believe the lawsuit would provide relief on their mortgages through deceptive marketing efforts.

“The defendents in this case fraudulently promised to win prompt mortgage relief for millions of vulnerable homeowners across the country” said Attorney General Kamela Harris. “Innocent people, already battered by the housing crisis, were targeted for fraud in their moment of distress.”

“Mass Joinder” Lawsuits are lawsuits with hundreds or even thousands of defendents with individually named causes of action. This is the first consumer action taken by the AG’s new Mortgage Fraud Strike Force.

Kramer’s and the other defendents were placed into Receivership on Monday August 15, 2011. This action was taken by the AG, to shut down a scheme operated by attorneys and their marketing partners, in which the defendents utlized false and misleading representations to induce thousands of borrowers into joining the lawsuit against their mortgage lender, often with promises of a “free house”. Defendents assets were also seized and their operations have been shut down.

In addition to the nineteen Department of Justice agents who participated in the raid, over 42 other law enforcement personnel took part from the California BAR, and HUD’s Office of the Inspector General. Additionally, over 16 bank accounts were seized by the Office of the Receiver.

It is believed that at least 2 million pieces of mail were sent out by mail to victims in at least 17 states. Defendents revenue is estimated to be in the millions of dollars. Consumers who paid to join the Mass Joinder lawsuits were frequently unable to receive answers to simple questions, such as whether they had been actually added to the lawsuit, or even establish contact with their attorneys who were representing them. Homeowners who have paid to join this suti are advised to call the CA BAR if they believe they are victims of fraud.

The Department of Justice has seized the practices of the following non-attorney defendants:
Attorneys Processing Center, LLC; Data Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division; Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco.

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

The complaint, temporary restraining order, examples of marketing documents and photos of the enforcement action are available with the electronic version of this release at http://oag.ca.gov/news.