LOS ANGELES (CN) - Hundreds of homeowners claim several California attorneys used fraudulent advertising "unrivaled in its falsity and brazenness," promising fictitious class-action settlements against major banks, and misused the name of the homeowners' attorney, Mitchell Stein, to dupe them into paying thousands of dollars.
Stein was one of a long list of defendants sued by California Attorney General Kamala Harris in August. That complaint accused the Kramer and Kaslow law office, and others, of running a foreclosure scam that suckered "thousands of California homeowners." The state claimed the defendants "prey on desperate consumer homeowners facing foreclosure" by selling participation in bogus "mass joinder" lawsuits and "litigation settlement(s)," but "No settlements exist and in some cases no lawsuit has even been filed."
Stein and his clients then countersued Attorney General Harris, claiming she was "doing Bank of America's bidding" by seizing legal files from Stein, denying his clients the right to the legal counsel of their choice. Similar countersuits were filed in Miami and New York.
In the latest barrage, in L.A. Superior Court, Stein and his clients continue their crusade against the law firms that, they say, prey on distressed homeowners under the guise of protecting them from fraud.
"Included among the conspiracy by all defendants, acting in concert, was utilizing the false advertising to adversely impact the rights of millions of home owners across the United States and to defraud their elected representatives for reasons amounting to nothing but pure 'profit,'" according to the complaint.
The plaintiffs include more than 300 homeowners from several states who hired Stein to represent them in lawsuits against Bank of America and other major lenders.
Stein and his clients claim the defendants made more than $10 million from their scheme.
Named as defendants are Brookstone Law, its owner Vito Torchia Jr., his associate Damian Kutzner, California law firm SML, SML partners Kenin Spivak, Theodore Maloney and Edwin Lasman, and Apex Legal Group and its employees Christopher Tomaszewski and Bridget Jones.
Stein filed his opening shot against a major bank, Ronald v. Bank of America, in March 2009, alleging that Bank of America had committed mortgage fraud and was illegally foreclosing on his clients' homes.
His clients claim that Stein succeeded in stopping foreclosures against their homes and expanded the lawsuit against the bank.
According to the complaint, Stein represented many California homeowners for no charge.
The plaintiffs say that in 2010, Stein enlisted defendant Spivak's help as co-counsel in the expanded litigation against Bank of America, despite Spivak's lack of experience in representing homeowners against banks.
"Unknown to attorney Stein or any of the plaintiffs in the Ronald case - most of whom are plaintiffs here - Spivak had ulterior motives for wanting to be part of the Ronald case," the complaint states. "His motives were one of fraud, deceit and profit, which he failed to disclose to anybody upon his association into the case by Mr. Stein in March 2010. Within three months of being associated into the case, defendant Spivak began asking anybody he could find - including Stein and at least half of the plaintiffs herein - for money or agreements to pay money."