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Complaint by Attorney General Defendents Kramer & Stein

Complaint by Attorney General Defendents Kramer & Stein

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Published by Nikki D White

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Published by: Nikki D White on Aug 22, 2011
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08/22/2011

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KAMALA
D.
HARRIS
Attorney General
of
California
FRANCEST.GRUNDER
Senior Assistant Attorney General
BENJAMIN DIEHL
Supervising Deputy Attorney General
JAMES
M.
TOMA
Deputy Attorney GeneralState Bar No. 217016
300
South Spring Street, Suite 1702Los Angeles, CA 90013Telephone: (213) 897-2128Fax: (213)
8~7-4951
Attorneys for PlaintiffTHE
PEO:PLE OF THESTATE OF CALIFORNIASUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF LOS
ANGELES-
NORTHWEST DISTRICTTHE PEOPLE OF THE STATE OFCALIFORNIA,
v.
Plaintiff,THE LAW OFFICES OF KRAMER ANDKASLOW, a California professional lawcorporation and also doing business as K2LAW, MASS LITIGATION ALLIANCE andCONSOLIDATED LITIGATION GROUP;PHILIP ALLEN KRAMER, an individual;MITCHELL
J.
STEIN
&
ASSOCIATES,INC., a California corporation; MITCHELL J.STEIN, an individual and doing business asMITCHELL
J.
STEIN
&
ASSOCIATES;CHRISTOPHER VAN SON, an individual anddoing business as THE LAW OFFICES OFCHRISTOPHER
J.
VAN
SON
and ·CONSOLIDATED LITIGATION GROUP;MESA LAW GROUP CORP., a Californiacorporation; PAUL WARREN PETERSEN, an-individual; ATTORNEYS PROCESSINGGBN+BR,bbG,-a-Gal-i-f-emia-limited-liabilitycompany and also doing business as .ATTORNEY PROCESSING CENTER andPROCESSING CENTER; DATAMANAGEMENT, LLC, a California limitedliability company; GARY DIGIROLAMO, anindividual; BILL MERRILL STEPHENSON,Case No.
{_(
oq
l/571
COMPLAINT
FOR
CIVIL PENALTIES,PERMANENT INJUNCTION,
AND
OTHER
EQUITABLE
RELIEF
[VERIFIED
ANSWER
REQUIRED ·PURSUANT TO CALIFORNIA CODE OF
CNIL
PROCEDURE SECTION 446]
COMPLAINT
FOR
CIVIL PENALTIES, PERMANENT INJUNCTION 
AND
OTHER EQUITABLE RELIEF 
 
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22232425262728an individual; MITIGATIONPROFESSIONALS, LLC, a California limitedliability company, and doing business as K2LAW; GLEN RENEAU, an individual; PATE,
MARIER
AND ASSOCIATES, INC.,
a
California corporation; JAMES ERIC PATE,
an
individual; RYAN WILLIAM MARIER, anindividual; HOME RETENTION DIVISION, abusiness organization
of
unknown form;MICHAEL ANTHONY TAPIA,
an
individualand doing business as CUSTOMERSOLUTIONS GROUP and
HOME
RETENTION DIVISION; LEWISMARKETING CORP., a Californiacorporation; CLARENCE
JOHN
BUTT, anindividual; THOMAS DAVID PHANCO, anindividual; and DOES 1 through 100,inclusive,DefendantsPlaintiff, the People
of
the State
of
California,
by
and through Kamala D. Harris, AttorneyGeneral
of
the State
of
California, alleges the following
on
information and belief:SUMMARY OF COMPLAINT
1.
Defendants prey on desperate consumer homeowners facing foreclosure and theloss
of
their homes
by
selling participation
in
so-called "mass joinder" lawsuits against theirmortgage lenders. Veterans
of
the loan modification industry, Defendants use deceptiveadvertising and telemarketing to recruit consumers to
join
these lawsuits, at a cost
of
thousands
of
dollars each. Consumers are led to believe that joining these lawsuits will stay foreclosures,reduce their loan balances, entitle
them
to monetary benefits and potentially get them their homesfree and clear
of
their mortgage.2.Defendants often initiate the scheme
by
sending misleading mailers, including"Litigation Settlement Notification" mailers to homeowners notifying them that they are potentialplaintiffs in a "national litigation settlement" with their lender.
No
settlements exist and
in
somecases no lawsuit has even
been
filed. Defendants' mailers nevertheless state that homeownersmay receive their homes free and clear
of
a mortgage, stop foreclosures, and receive thousands
of
2 COMPLAINT
FOR
CIVIL PENALTIES, PERMANENT INJUNCTION AND
OTHER
EQUITABLE
RELIEF 
 
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2526
2728dollars in compensation for damages. The mailer states it is a "fmal notice" and that a phone inresponse
is
required, luring homeowners into contacting Defendants.Once homeowners call the telephone numbers, Defendants engage them withadditional false and misleading claims. ·Defendants' telemarketers, who are not attorneys, providemisleading advice to homeowners regarding legal procedures and the likely results and benefits
of
joining the mass joinder lawsuits. Defendants tell consumers that judges have already ruled thatthe banks were practicing predatory lending and that consumers have already received thepromised results. Defendants make false and misleading claims the mass joinder lawyers haveachieved substantial victories against the bank lenders, including obtaining homes free and clear,stopping foreclosures, and obtaining orders rescinding notices
of
default. Defendants claim thatthe attorneys handling the mass joinder lawsuits have tried thousands
of
cases, and only take onqualified clients likely to be helped by the lawsuit.
4.
Homeowners are told that a settlement could happen at any moment and only thosewho
have.
joined the lawsuit will receive the promised benefits. Defendants repeatedly make falseor misleading statements to homeowners to get them to sign a retainer agreement and pay themthousands
of
dollars. Once homeowners sign a contract to join a "mass joinder" lawsuit andDefendants take their money, as much as $10,000, from their bank accounts, homeowners fmdthey are unable to speal( with an attorney with knowledge
of
the lawsuit. Basic questions such
as
whether the homeowner has been added to the lawsuit
go
unanswered. Some homeowners payDefendants thousands
of
dollars only to lose their homes shortly thereafter to foreclosure.
5.
Thousands
of
California homeowners have fallen for Defendants' scam, andDefendants have exported their mass joinder scheme nationwide.
In
this action, Plaintiff seeks anorder permanently enjoining Defendants from engaging in their unlawful business practices,granting restitution for affected consumers, imposing civil penalties, and granting all other reliefavailable under California law. By the filing this lawsuit, Plaintiff does not seek to interfere withany consumer lawsuits or opine on the validity
of
any legal theories used to challenge allegedfraud by mortgage lenders or servicers. However, Defendants should not be allowed to violate
3
COMPLAINT FOR CIVIL PENALTIES, PERMANENT INJUNCTION 
AND
OTHER EQUITABLE RELIEF

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