California’s Attorney-General Isn’t Happy; Harris Announces Huge Lawsuit

Eighteen people in California started this week with a new set of problems. Late last week, on Thursday, August 18, the State’s Attorney General, Kamala Harris, held a press conference and announced plans to move forward with a civil litigation against several law firms, call centers and individuals in the state suspected of allegedly bilking thousands of dollars out of financially strapped homeowners.

According to documents and Harris’ announcement, all of the named defendants allegedly worked together in developing a system where call center employees (and various individuals) cold-called homeowners on the verge of foreclosure, in an attempt to get them to sign on to a joinder lawsuit against the bank that approved their unsustainable home loan.

Of the eighteen named defendants, four are lawyers. It could be argued that Phillip Kramer, of Kramer & Kaslow, is the defendant worst hit. His law firm, Kramer & Kaslow, has allegedly been put into a receivership and all assets have been frozen.

So what’s the alleged scheme the defendants developed and gamed?

According to reports, all the named parties were allegedly part of a system wherein individuals would cold-call debt-desperate homeowners facing foreclosure. If you believe the Attorney-General’s office, the telemarketers explained to the homeowners that a mere $5,000 to $10,000 dollars could buy them a spot on a mass-joinder litigation against major banks. The sales script, the prosecution alleges, was misleading in as much as it overstated the benefits the debtor could expect to receive by participating in the suit.

According to Harris’ team, the lawyers named in the suit were allegedly involved in the plan’s development and knowingly participated in fraudulent activities. At the time of this writing, Mr. Kramer and the other attorney’s named – including Mitchell J. Stein – have yet to comment on the case.

But there is another side to this story. Both the websites for Kramer’s and Stein’s law firms feature a page warning consumers that unauthorized third-parties have been unlawfully using their firms’ names.

There were also pages on each website that alluded to each firms’ involvement in a mass joinder litigation against major banks.

The way I see it, an element of this lawsuit will undoubtedly come down to a question of “which came first, the chicken or the egg?”

The Los Angeles Supreme Court will be hearing arguments in this case.

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