The short version of the story is that Kassas' office, along with 13 other locations across Orange and Los Angeles counties, was visited by state and federal law-enforcement agents and placed into receivership for what California Attorney General Kamala Harris says was a marketing fraud scheme aimed at getting desperate homeowners to join mass lawsuits against mortgage holders (think Chase and Bank of America). Kassas' law firm wasn't specifically named in the lawsuit brought by the state, a fact that bolstered angry commenters who heralded the law firm's attempts to help beleaguered homeowners and trashed us for what they considered libelous reporting.
Well, California's Office of the Receiver has published its preliminary report on what it found the day it visited the office located at 2975 Red Hill Ave. (it's available at massjoinderreceiver.com
). One particularly interesting nugget is the claim that the office wasn't even a law firm, but rather more of a sales company. It should also be mentioned that on Aug. 22, Orange County Superior Court denied an application by Mr. Kassas to be lifted from receivership. For those of us without a law degree, a receiver is a court-appointed administrator who takes custody of the property or funds of others pending litigation.
As for management of the office, it appears two other individuals, James Pate and Ryan Marier, were in charge of the operation and were formerly of the Mesa Law Group (also named in the report).
"We determined that these premises were covered by the court's order, as they were assets of defendant Mesa Law Group (which holds the lease on premises) and were utilized by defendants Pate and Marier, Marier and Associates 'to conduct business operations that relate to unlawful activity alleged in the complaint.'" The report goes on to state, "We present below a small sampling of evidence we found at this site, which clearly indicated that this was not really a law firm, but primarily a sales company operated by Pate and Marier, who were selling illegal loan-modification services generally as a prelude to selling positions in a mass joinder case."
Evidence included a seating chart naming Pate as the CEO and Marier as president, a telemarketing script located in the cubicle of Jordan Pate, inter-office emails, and records indicating 900 cases had been signed up for services between March 21 and Aug. 16.
Each client allegedly payed an upfront retainer generally set at $4,500. The goal was to transition these clients to the mass lawsuit for an additional $1,700, plus $300 per month for litigation. Sales agents were reportedly payed commissions, though the Office of Receiver has yet to determine if this commission was paid by Kassas, the other two defendants or a related entity.
Interestingly enough, weeks before the Receiver published its report, I was contacted by a man claiming to be a client of the firm who was facing foreclosure of his home. He said he spoke to an employee named Jordan Pate, whose official title was "relationship manager." After paying a retainer of $7,500, this man (who spoke under the condition of anonymity) explained he never wanted to be part of a lawsuit. "I asked how many lawyers are there at that firm, and it sounded like there might be two," he said. "One that does the litigation, and Anthony is the front guy. I asked to speak with one of them the entire time; I wasn't looking to be part of a lawsuit. I continually asked to speak to the lawyers. I never spoke to a lawyer."
The juiciest part of the Receiver's report includes a few choice excerpts from emails sent out by a sales team leader that read like pithy dialogue from Jerry Maguire. "Be determined today, get a client to say yes. . . . I want a huge day today. There is no reason we can't do 30 deals today," read one. Another stated, "It's too quiet in here people. Let's get some movement. Who's a [sic] got a deal for me?" My personal favorite: "Wake up, team!! Don't you guys like making money? I need animals on this team who will stop at nothing to close a deal. . . . WHERE YOU AT?"
Sounds like the salt of the earth. We still wish them all the best.
ORIGINAL POST Aug. 18, 3:30 p.m.:
Usually, when an aspiring journalist imagines the excitement of his job, he has visions of far-flung battlefields or back-alley crime scenes in some gritty urban environment, not the sterile office-park building that houses the Costa Mesa newsroom where he works.
But that's exactly where the action unfolded yesterday, when several agents representing the California Department of Justice and at least one federal agent descended on our building. Damn straight we put a blockade around Moxley's office.
Courtesy California Department of Justice
Thankfully, Big Brother didn't target us this time. The agents carried out seized boxes from our neighbor's office, the law firm of Anthony Kassas (with whom we share a common lobby), and corralled all of its well-heeled employees in the back parking lot before escorting them off the property. We tried to chat with four officers standing in our front lobby, some with shiny badges dangling from their necks. Though they were amiable and joked about looking for some tall guy with glasses, they said they couldn't discuss the operation.
But today, the California Department of Justice announced it has sued the law offices of Kramer & Kaslow, two other unnamed law firms, three unnamed lawyers and 14 other defendants for what Attorney General Kamala Harris views as deceptive marketing practices, namely coercing homeowners to join "mass joinder law suits" against their mortgage lenders.
Yesterday's operation involved 19 DOJ agents, and 42 agents and other personnel from the US Department of Housing and Urban Development office of Inspector General, California State Bar and the Office of the Receiver, all of whom were dispatched to 14 locations in Los Angeles and Orange Counties.
According to a press release made available by the DOJ today, 16 bank accounts were seized.
"Defendants deceptively led homeowners to believe that by joining these lawsuits, they would stop pending foreclosures, reduce their loan balances or interest rates, obtain money damages and even receive title to their homes free and clear of their existing mortgages," the release alleges. "Consumers who paid to join the mass joinder lawsuits were frequently unable to receive answers to simple questions, such as whether they had been added to the lawsuit or even to establish contact with defendants ... When consumers contacted the defendants, they were given advice by sales agents, not attorneys."
We'd like to say we feel bad for the firm, whose doors have been shuttered, but the sight of an empty parking lot free of sports cars zipping through the spaces without regard for other drivers was nice. Before the law firm arrived in this building, there was no need for signs to be placed around the smoking area asking folks not to spit on the handrails. And it was always a bit disheartening when you would encounter one of the nicely dressed employees in the halls and offered a friendly hello only to be looked at like something that had crawled from a storm drain. We wish them the best of luck.