NPR-

California prosecutors filed a major lawsuit against several lawyers and call center operators for allegedly running a nationwide scam to dupe desperate homeowners into paying thousands of dollars to join dubious lawsuits against some of the country’s largest banks.

The complaint to be unsealed Thursday in Los Angeles County Superior Court accuses prominent foreclosure attorneys Philip Kramer and Mitchell Stein and at least 17 other individuals and businesses of luring borrowers into a scheme that falsely promised a cut of future settlements.

The lawsuit portrays the defendants as the most recent in the chain of mortgage-related scammers who helped fuel the housing bubble and have cashed in on its collapse. The defendants previously worked in the fraud-ridden loan modification industry.

Borrowers were lured into the scheme with claims that courts have found most mortgage lenders to have practiced predatory lending or approved inappropriate loans, and that the homeowners’ own banks meet the criteria for having perpetrated such “violations,” the complaint says.

“Defendants use deceptive advertising and telemarketing to recruit consumers to join these lawsuits,” according to the complaint filed by prosecutors.

California Attorney General Kamala Harris was set to announce the case Thursday, a day after state bar investigators and state Department of Justice agents served defendants with copies of the complaint at nine locations in Los Angeles and Orange counties.

[NPR]