Complaint Review: Consolidated Litigation Group

Attorney General Kamala D. Harris Sues Law Firms Engaged in National "Mass Joinder" Mortgage Fraud SAN FRANCISCO --- Attorney General Kamala D. Harris today announced that the California Department of Justice, in conjunction with the State Bar of California, has sued multiple entities accused of fraudulently taking millions of dollars from thousands of homeowners who were led to believe they would receive relief on their mortgages.

Attorney General Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of "mass joinder" lawsuits. "Mass joinder" lawsuits are lawsuits with hundreds, or more, individually named plaintiffs. This is the first consumer action by the Attorney General's Mortgage Fraud Strike Force.

Kramer's firm and other defendants were placed into receivership on Monday, Aug. 15. The legal actions were designed to shut down a scheme operated by attorneys and their marketing partners, in which defendants used false and misleading representations to induce thousands of homeowners into joining the mass joinder lawsuits against their mortgage lenders. Defendants also had their assets seized and were enjoined from continuing their operations. Nineteen DOJ special agents participated as the firms were taken over Wednesday, Aug. 17, along with 42 agents and other personnel from HUD's Office of Inspector General, the California State Bar, and the Office of Receiver Thomas McNamara at 14 locations in Los Angeles and Orange Counties. Sixteen bank accounts were seized.

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

"The number of lawyers who have tried to take advantage of distressed homeowners in these tough economic times is nothing short of shocking," said State Bar President William Hebert. "By taking over the practices of four attorneys accused of fraudulent marketing practices, the State Bar can put a stop to their deplorable conduct as part of our ongoing effort to protect the public."

It is believed that at least two million pieces of mail were sent out by defendants to victims in at least 17 states. Defendants' revenue from this scam is estimated to be in the millions of dollars.

As alleged in the lawsuit, defendants preyed on desperate homeowners facing foreclosure by selling them participation as plaintiffs in mass joinder lawsuits against mortgage lenders. Defendants deceptively led homeowners to believe that by joining these lawsuits, they would stop pending foreclosures, reduce their loan balances or interest rates, obtain money damages, and even receive title to their homes free and clear of their existing mortgage. Defendants charged homeowners retainer fees of up to $10,000 to join as plaintiffs to a mass joinder lawsuit against their lender or loan servicer.

Consumers who paid to join the mass joinder lawsuits were frequently unable to receive answers to simple questions, such as whether they had been added to the lawsuit, or even to establish contact with defendants. Some consumers lost their homes shortly after paying the retainer fees demanded by defendants.

This mass joinder scam began with deceptive mass mailers, the lawsuit alleges. Some mailers, designed to appear as official settlement notices or government documents, informed homeowners that they were potential plaintiffs in a "national litigation settlement" against their lender. No settlements existed and in many cases no lawsuit had even been filed. Defendants also advertised through their web sites.

When consumers contacted the defendants, they were given legal advice by sales agents, not attorneys, who made additional deceptive statements and provided (often inaccurate) legal advice about the supposedly "likely" results of joining the lawsuits. Defendants unlawfully paid commissions to their sales representatives on a per client sign-up basis, a practice known as "running and capping."

Defendants' alleged misconduct violates the following laws:
-False advertising, in violation of section 17500 of the Business and Professions Code
-Unfair, fraudulent and unlawful business practices, in violation of section 17200 of the Business and Professions Code
-Unlawful running and capping, in violation of section 6152, subdivision (a) of the Business and Professions Code (i.e., a lawyer unlawfully paying a non-lawyer to solicit or procure business)
-Improper fee splitting (defendants unlawfully splitting legal fees with non-attorneys)
-Failing to register with the Department of Justice as a telephonic seller.

Homeowners who have paid to be added to one of the lawsuits should contact the State Bar if they feel they may be victims of this scam. They can also contact a HUD-certified housing counselor for general mortgage related assistance.

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.

I live in Henderson, Nevada. Around July 1, 2011 I received a card in the US mail from the Home Retention Division, saying there was a Nationwide Pending Lawsuit against Met Life Home Loans. I took out a Reverse Mortgage on a Free and Clear property January 31, 2010. I want to get out of this Reverse Mortgage. I called the telephone number on the card and spoke with a Litigation Ambassador about opting into this Met Life lawsuit. I was told I would get my house back free and clear and a monetary damage award of anywhere from $45,000 to whatever. I checked the State bar on Christopher J. Van Son and found no records of public discipline. I wish I had checked deeper, before I put up $4,000. I became suspicious when I was e mailed a copy of a Demand Letter to the president of Met Life. This 9 page letter demanded Loan Modification and a Copy of Executed Loan Documents & Promissory Note. The demand letter had nothing to do with my situation. The letter mentioned California violations and I live in Henderson, Nevada. Then, I went on the internet and typed in one of the other attorneys, Philip A. Kramer with the law firm of Kramer and Kaslow. Wow! What came up on consumer alert shocked me. The state of New Jersey took license of Loan City, Inc aka Kramer and  Kaslow. Was I mad. I also discovered that these four attorney's Philip A. Kramer, Christopher J. Van Son, Michael J. Stein, Theodore Maloney, aren't licensed in Nevada. I even asked if  Philip A. Kramer was licensed in Nevada and I was told by Henry Medina, another Litigation Ambassador that they were licensed. All lies. I am in the process of writing a big complaint to the California State Bar. I am demanding my $4,000 back. The California Department of Real Estate and the Washington State Department of Financial Institutions is after these crooks. I 

I find it very interesting that "Eugene - Encino (United States of America)" is very passionately reporting over and over again and again about this CLG Co that for the most part appears to be a helping people in some capacity. His very detailed very long reports tell me that he is more than likely either an x-employee or a competitor. Unfortunately there is no way of verifying the credibility of most accusations or accolades listed on this site. 

Thats interesting about WA.  The issue is just a licensing issue, and is separate from litigation experience.  All they have to do is register for a license.  That naive comment about "....provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer."      Lawsuits are a calculated investment gamble.   No bank will provide this written offer unless they are forced and sued. All I need to know is if the government will punish the banks, and someone pointed out  http://www.huffingtonpost.com/2011/07/06/fdic-mortgage-lawsuits-bank-foreclosures_n_891689.html .   On Consolidated litigation group's site, the attorney link shows that the main attorney is Christopher Van Son.  I agree with you that he is a fine attorney whom you will probably be represented by if you decided to proceed with the case.   It's too bad  WA residents will have to seek an unrealistic written offer that no one can deliver there without real legal battle with banks.

Thats interesting about WA.  The issue is just a licensing issue, and is separate from litigation experience.  All they have to do is register for a license.  That naive comment about "....provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer."      Lawsuits are a calculated investment gamble.   No bank will provide this written offer unless they are forced and sued. All I need to know is if the government will punish the banks, and someone pointed out  http://www.huffingtonpost.com/2011/07/06/fdic-mortgage-lawsuits-bank-foreclosures_n_891689.html .   On Consolidated litigation group's site, the attorney link shows that the main attorney is Christopher Van Son.  I agree with you that he is a fine attorney whom you will probably be represented by if you decided to proceed with the case.   It's too bad  WA residents will have to seek an unrealistic written offer that no one can deliver there without real legal battle with banks.

Thats interesting about WA.  The issue is just a licensing issue, and is separate from litigation experience.  All they have to do is register for a license.  That naive comment about "....provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer."      Lawsuits are a calculated investment gamble.   No bank will provide this written offer unless they are forced and sued. All I need to know is if the government will punish the banks, and someone pointed out  http://www.huffingtonpost.com/2011/07/06/fdic-mortgage-lawsuits-bank-foreclosures_n_891689.html .   On Consolidated litigation group's site, the attorney link shows that the main attorney is Christopher Van Son.  I agree with you that he is a fine attorney whom you will probably be represented by if you decided to proceed with the case.   It's too bad  WA residents will have to seek an unrealistic written offer that no one can deliver there without real legal battle with banks.

http://www.dfi.wa.gov/consumers/alerts/kramer-kaslow.htm

Unlicensed Loan Modification Services and Advance Fees
Many Washington consumers have reported receiving misleading advertisements such as the ones shown here:

Sample Advertisement 1 (PDF)*
Sample Advertisement 2 (PDF)*
The Department of Financial Institutions has conducted an investigation of the source of these materials, and ascertained that they are neither from the consumers lender or any branch of the government, but from companies affiliated with a California law firm, Kramer & Kaslow, and a professional corporation called "Consolidated Litigation Group."
In late 2010, these affiliated companies sent mailings to Washington consumers for loan modification services; in early 2011, the advertisements were for forensic loan audits (mortgage loan compliance review).
Fees for loan modification services were reported as $3,000 or more; the "mortgage loan compliance review" was quoted as $2,500, fully refundable if no violations are found.
If the modification efforts are unsuccessful, or the forensic loan audit uncovers "predatory lending violations", the consumers are then solicited to become a plaintiff in a mass joinder lawsuit with "Consolidated Litigation Group."
Initially this inclusion required no extra fees; however, recent consumer reports indicate that the fees to join the "mass joinder lawsuit" are quoted as $1,500 or more.
Unlicensed Loan Modification Services and Advance Fees
Washington state law requires third-party loan modification companies to be licensed with the Department of Financial Institutions. To date, none of the companies affiliated with these advertisements are licensed with the Department in any capacity.
Earlier this year, the federal Mortgage Assistance Relief Services (MARS) Rule was issued to protect struggling homeowners from being further victimized by "loan modification" and other mortgage relief scams.
The most important aspect of this rule is a ban on advance fees. Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.
The MARS rule has a section for attorneys conducting loan modification or other mortgage relief services. To be exempt from this Rule, attorneys must meet three conditions:

they are engaged in the practice of law
they are licensed in the state where the consumer or the dwelling is located
they are complying with state laws and regulations governing attorney conduct related to the rule.
To be exempt from the advance fee ban, attorneys must meet a fourth requirement they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts.
About Mass Joinder Lawsuits
According to Consolidated Litigation Group, P.C., there are four California attorneys associated with this litigation group:

Philip Kramer
Mitchell J. Stein
Theodore Maloney
Christopher J. Van Son
The Department of Financial Institutions has determined that none of these attorneys, affiliated with the mass joinder litigation connected to this advertisement, are licensed to practice law with the Washington State Bar. This conduct has been referred to the Washington State Bar for potential action.
These attorneys, however, are apparently eligible to practice law in California. The State of Californias Department of Real Estate (CA DRE) has issued its own Consumer Alert regarding mass litigation or mass joinder lawsuits being marketed to consumers. You can read the CA DRE Consumer Alert at www.dre.ca.gov/pdf_docs/ca/ConsumeAlert_WarningreMassLitigation.pdf.
Additionally, the Better Business Bureau (BBB) also recently issued its own Consumer Alert regarding mass joinder lawsuit mailings. You can read the BBB Consumer Alert at www.bbb.org/us/article/bbb-warns-homeowners-mass-joinder-lawsuit-mailings-may-be-latest-advance-fee-mortgage-modification-scheme-26797.
The Department of Financial Institutions would like to encourage all Washington consumers to verify that any loan modification service they consider engaging is properly licensed with the Department of Financial Institutions and complying with the MARS Rule and applicable state law.
Consumers are also encouraged to conduct internet research on the company to check for possible consumer complaints and to learn more about the company. For Washington consumers whose home is in jeopardy due to default or financial troubles, please visit the "Washington Homeownership Information" website at www.homeownership.wa.gov for information on how to obtain free assistance in working with your lender prior to foreclosure.
For more information, contact the Department of Financial Institutions at 1.877.RING DFI (746-4334).

My experience with the team over at the Law Office of Christopher Van Son of Consolidated Litigation Group has exceeded all of my expectations.  The case analyst walked me through the initial intake answering all of my questions with the utmost professionalism.  He also provided me with valuable information on how to stop the bank from taking my home and fight back against the bank and their attorneys.  I encourage all homeowners today to exercise your legal rights.