Key disbarment pending in foreclosure fraud investigation
Philip A.
Kramer, a Calabasas attorney at the center of a national loan modification
scam, agreed to be disbarred last month.
Kramer (bar number 113969), 52, admitted to numerous counts of misconduct including collection of illegal fees,
failure to return advance fees and accepting employment in states where he was
not licensed to practice law. Kramer also agreed to pay $122,000 in restitution
to 27 former clients as part of a stipulation accepted April 13 by the State
Bar Court.
“As the
leading watchdog of the legal profession, the State Bar does not tolerate
unethical behavior by attorneys,” Acting
Chief Trial Counsel Jayne Kim
said. “This disbarment recommendation brings victims of Kramer’s malfeasance
one step closer to justice and exemplifies the State Bar’s commitment to public
protection.”
Kramer was
one of several lawyers who caught the attention of authorities last year for
allegedly targeting thousands of homeowners facing foreclosure and collecting
up-front fees for help that never materialized.
The bar and Attorney
General Kamala Harris shut down the firms and Harris sued Kramer and more than
a dozen other defendants in Los Angeles County Superior Court. The suit accused
the lawyers of working with mass marketers to entice homeowners through false
and misleading mailers to join so-called mass joinder lawsuits against mortgage
lenders. Homeowners in California and other states paid retainer fees ranging
from $3,500 to $10,000 but in numerous cases were never contacted by an
attorney or included in a lawsuit.
Kramer’s
disbarment is pending California Supreme Court approval, but he has been placed
on involuntary inactive status.
Last year,
Kramer unsuccessfully fought the seizure of his law practice under Business
& Professions Code section 6190. Although aimed at attorneys with physical
or mental disabilities, the section applies to lawyers who “for any reason” are
incapable of devoting the time and attention to their clients.
Two other
attorneys are facing possible discipline as a result of the investigation. They
are:
- Paul W.
Petersen (bar number 170922), 51, of Irvine, is facing disbarment by default
after he failed to appear in State Bar Court for a March 27 trial on various
counts of misconduct including allegations of improper solicitation, unlawful
collection of advance fees, failure to refund fees, and failure to perform
services competently. Under the bar’s rules of procedure, unless the default is
set aside the State Bar Court will recommend Petersen’s disbarment to the state
Supreme Court.
- Anthony J.
Kassas (bar number 227647), 35, of Diamond Bar, faces trial on 285 counts of
disciplinary charges. The formal charges, filed April 6 by the Office of Chief
Trial Counsel, include allegations that Kassas improperly solicited clients,
collected unlawful advance fees, failed to provide proper accounting of funds
and aided the unauthorized practice of law by nonlawyers.
Complaints
against attorneys involved in mortgage-relief schemes spiked during the housing
crisis, prompting the bar to form a task force.
Since early
2009, the State Bar has investigated 1,186 complaints involving roughly 153
licensed California lawyers. Nearly 70 lawyers have been disciplined, including
18 who were disbarred. About 720 cases are still pending before the State Bar
Court and another 291 matters are under investigation.