Calabasas Law Firm Sued by State for Alleged Fraud

A Calabasas law firm accused of bilking close to 2,500 distressed homeowners facing foreclosure was raided by the Department of Justice and other state authorities on Wednesday.

Nineteen DOJ agents helped seize computers, client files and 16 bank accounts from the offices of The firm is being sued by State Attorney General Kamala Harris and the State Bar of California.

Harris alleges the firm fraudulently took money from clients in a so-called "mass joinder lawsuit" scam involving two other law firms and 14 other defendants that are named in the lawsuit.

The alleged scam began with the law firms sending deceptive mailers throughout the country to homeowners informing them that they were plaintiffs in a "national litigation settlement" against their lenders, according to a DOJ press release.

Harris said in the release that the law firms urged homeowners in California and 17 other states to pay up to $10,000 to join the class action lawsuit, but in reality attorneys treated plaintiffs' cases separately.

Clients were frequently unable to receive answers to questions, a DOJ release read. The firms raised millions of dollars from their clients, according to the DOJ.

"Some consumers lost their homes shortly after paying the retainer fees demanded by defendants," Harris said.

Kramer & Kaslow promised clients interest rates as low as 2 percent, principal reduction or elimination and financial damages in some cases, according to the lawsuit.

Those named in the suit are being charged with fraudulent and unfair business practices, unlawfully splitting legal fees with non-attorneys, and failing to register with the DOJ as a telephonic seller, according to the lawsuit.

Four attorneys are named in the lawsuit. Harris dubbed law firm owner Philip Kramer "the ringleader," according to City News Service.

Kramer & Kaslow's voicemail has been replaced with a new message from the California Bar Association that states clients' files have been confiscated and how they can go about retrieving their documents.

City News Service reported that the firm could face tens of millions of dollars in fines, penalties and and restitution.

If you were a victim of this scam and a client of Kramer & Kaslow, please call a hotline set up by the California State Bar at 213-765-1672.

Check out the accompanying documents to view the lawsuit as well as a consumer alert about the scam.

City News Service was used in compiling this report.