CA Attorney General Takes Lawyers to Task over Mass Joinder Scam

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updated Aug 25, 2011

The suit is against three law firms, three attorneys and 14 other defendants. At least 2,500 homeowners were allegedly defrauded out of millions of dollars, through their participation in an alleged ‘mass joinder' lawsuit, which the fraud ring billed to victims as a class action suit designed to force mortgage companies to reduce loan payments, interest rates, win monetary damages, and/or stop foreclosures. In many cases, homeowners were charged fees of up to $10,000 to become plaintiffs in said lawsuit - which didn't even exist.

Charges include sending over 2 million pieces of deceptive mail in the state of California, and almost twenty other states, as well as using misleading advertising and telemarketing practices to lure struggling homeowners into participating in the lawsuit, Harris explained in the August 18th cnn.com article, ''California attorney general sues lawyers in alleged mortgage scam''.

Senior partner Philip Kramer of law firm Kramer & Kaslow was identified as the ''ringleader'' of the scam by Harris, per the cnn.com article.

The suit is seeking tens of millions of dollars in fines, penalties, damages and restitution.

California State Bar President William Hebert was quoted as saying in the cnn.com article: ''The message to lawyers out there is that if you think you can take advantage of clients, you can't. This is an example of a new aggressive stance we're taking against lawyers that you're going to see in the months and years to come.''
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Hebert also explained that since 2009, 20 lawyers have been disbarred or forced into resignation due to mortgage loan scams. Per the cnn.com article, many victims of these types of frauds are senior citizens and minorities, especially Latinos.

Philip Warmanen is a 71-year-old travel agent from Jacksonville, Florida who joined the suit to the tune of $4,000 after responding to a mailer from Kramer's law firm earlier this year.

Warmanen was quoted as saying in the August 18th forbes.com article. ''Lawyers accused of scam in bank suits'': ''They said there was a strong likelihood that this would be successful and that they had a few cases where the judgment had come through positively in favor of the complainants. They led me to believe that that might be my case.''
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