Alleged foreclosure-prevention scam shut down by California
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 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.
A phone call to Kramer's office was answered by a recording saying the Los Angeles Superior Court had taken control of the office and its files.
State and federal regulators, criticized for doing little to stop reckless lending and fraud during the housing boom, have rushed to find villains in the aftermath of the mortgage meltdown.
In May, Harris announced the formation of a special squad of lawyers and investigators to investigate mortgage fraud. But in June she said its operations would be curtailed because of state budget cuts.
The case announced Thursday is the first stemming from work by the task force, Harris said.
The attorney general's website offers advice on avoiding scams that promise loan modifications, with a list of individuals and businesses that have been sued.
-- E. Scott Reckard
Photo: California Atty. Gen. Kamala Harris, shown in May. Credit: Los Angeles Times / Mel Melcon