Fraudulent Mass Joinder Lawsuits

Each year the Federal Trade Commission (FTC) receives complaints from consumers. In 2011, more than 1.8 million complaints were made.  More than half, or 55%, were related to fraud costing individuals more than $1.5 billion.

What I found alarming was Colorado had the highest per capita rate of reported fraud and other types of complaints last year, followed by Delaware and Maryland.  New York ranked #36.

During good and bad times, there are always people taking advantage of others. Con artists are creative. Mortgage fraud is massive – everywhere.

Consumers have been answering ads online for rental properties from people who they believe are agents. When renting a property, get the keys to the property before you give a real estate agent a deposit. The scam – the ‘agent’ grabs the deposit and the consumer has no keys, no rental and no valid contract.

A huge scam crossing the entire country is “mass-joinder’ lawsuits. Mass Joinder in layman’s terms is a group of people bringing suit against a large entity with the group sharing the cost of the lawsuit and the settlement. Consumers pay an upfront fee usually between $3,000 – $10,000 for a chance to “win big”.

In California, four attorneys; Christopher Van Son, Mitchell Stein, Philip Kramer, and Paul Petersen joined forces in a “mass joinder” lawsuit. They hired more than 100 marketers to send mass mailings nationwide. The mailers looked like official government notices and indicated they were “legal settlement notifications” and the recipient would be a “named plaintiff”. The mailer gave the impression there would be a quick settlement, and the recipient had to act quickly to get as much as $75,000, a loan forgiveness and had a 90% chance of winning.  Thousands of clients signed up, most never even met or consulted with one of the attorneys.  “The group fraudulently promised to win prompt mortgage relief for millions of vulnerable homeowners across the country”, said California Attorney General Harris. In California, the court can take over the practice of an attorney.  A bar was appointed to secure the four lawyers’ files, freeze their bank accounts and notify their clients to seek new counsel.

Clients had paid between $3,500 and $10,000 to the four attorneys. One attorney, Kramer, had 19 bank accounts showing he had made deposits of more than $3 million between December 2010 and March 2011.  The attorneys anticipated more than $45 million in “annual sales”.  Whether the clients ever get any money returned, remains to be seen.

Also in California, the FTC has filed its first case against alleged scammers Sameer Lakhany, The Credit Shop, Fidelity Legal Services, Titanium Realty and Precision Law Center, Inc. and Precision Law Center LLC as part of the FTC’s crackdown on mortgage relief scams. Lakhany also did business using three websites, HouseHoldRelief.org, FreeFedLoanMod.org and MyHomeSupport.org. The complaint charges the defendants victimized hundreds of consumers with two related scams. The FTC claims the defendants masqueraded as a specialty law firm Precision Law Center, sent out direct mail that looked like a class action settlement notice, holding a false promise to consumers if they sued their lenders, along with other homeowners they’d get forgiveness of all delinquent payments, fees and penalties, stop the foreclosure proceeding, get their credit restored, possibly get compensatory damages of $22,500 and possibly receive punitive damages in $52,500.  Distressed homeowners shelled out more than $1 million to the company thinking they’d get a piece of the pie.

On March 5, 2012, FTC filed a temporary restraining order against Lakhany and the five companies (named above). On March 7, 2012 the Court granted the request with an asset freeze and appointment of a temporary receiver. On March 19, 2012, the Court entered a stipulated Preliminary Injunction Order with asset freeze against Lakhany and 3 of the corporate defendants. On March 21, 2012, the Court entered a similar order against the rest of the defendants along with the five above-named companies. The FTC files a complaint when it has “reason to believe” the law has been violated. The complaint is not a finding or ruling.

There is strong evidence, the company has changed names, with another man, whose name was often on Precision’s papers, running the company out of Irvine, CA.

Homeowners are overwrought as it is without being scammed by these artists posing as real companies holding quick solutions.  There are no quick fixes and one should never be promised anything.

Even if your foreclosure process has begun, there are legitimate options you should explore to try to save your home.

Homeowners and anyone seeking help from a qualified, legitimate Foreclosure Defense Attorney should:

* Ask questions of your attorney, including how many mortgage-related cases the attorney has filed and handled through trial or      settlement. Ask for copies of the pleadings and copies of any news articles about them.

* Get specific information about the work the lawyer (or firm) will do for you, including the cost and the payment schedule.

* Stay away from attorneys who make bold promises, or who guarantee the outcome of your case. A reputable attorney doesn’t guarantee  results, no matter what your circumstances.

* Maintain communication with your attorney throughout your case.

* Ask friends or relatives for the name of an attorney with a proven record of getting help for homeowners facing foreclosure.

Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.

This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.

About theglawfirm1

Gantenbein Law Firm is a Denver, Colorado Tax Law Firm, servicing all of Colorado. Gantenbein Law Firm also specializes in Colorado Real Estate Law, Colorado Foreclosure Defense, Wills & Trusts, and Business Law.
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2 Responses to Fraudulent Mass Joinder Lawsuits

  1. Pingback: Misjoinder and Non Joinder - My Life Book

  2. Jay2013 says:

    The fake lawsuit scammers are back at it but now they go by Residential Litigation Group in Florida. They are charging thousands of dollars upfront and promising results that noone can deliver. Save your money and notify the attorney general. If you already gave them your bank account information, file a complaint and get your money back NOW!!

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