Lawyer Agrees to Disbarment for his Role in Loan Modification Scam

Allison Tussey —  May 2, 2012 — Leave a comment

Philip A. Kramer, 52, Calabasas, California, an attorney at the center of a national loan modification scam, agreed in April 2012 to be disbarred.

Kramer (bar number 113969) 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.

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, Irvine, California, 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, Diamond Bar, California, 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.

“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.”

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Allison Tussey

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