LA
10/28/2011 02:37 pm ET Updated Dec 28, 2011

Mitchell J. Stein Sues Kamala Harris After She Accused Him Of Mortgage-Related Fraud

Story courtesy of California Watch.

By Will Evans

Los Angeles-area attorney Mitchell J. Stein refers to himself as "The Doberman" and his website advertises, "You Hold The Leash."

In August, California Attorney General Kamala Harris raided Stein's offices and accused him and other lawyers of fraudulently misleading thousands of struggling homeowners into paying to be part of mass lawsuits against mortgage lenders like Bank of America.

But Stein sued back, after warning on his Twitter account that "The Doberman is about to take a large bite out of Kamala Harris." Stein has accused the attorney general of being "the pawn of America’s most powerful banks,” claiming that Bank of America "corruptly funneled money" to Harris, according to one of his lawsuits.

As the legal sparring continues, the alleged fraud victims are running out of time.

Virginia Hosking received a notice last week directing her to vacate her foreclosed Whittier house within three days.

"Now I’m sitting here freaking out, afraid to walk out my front door in case they come lock me out," Hosking said.

Hosking said her husband had just passed away and she was facing foreclosure last year when she paid $4,000 to another law firm targeted in Harris' fraud suit.

Hosking said she was told that joining the lawsuit against her mortgage lender, Bank of America, would help save her house. At some point, Stein's firm, which has been suing Bank of America since 2009, took charge of Hosking's case.

The attorney general accused the lawyers of deceiving homeowners into thinking that the lawsuits would stop foreclosures or reduce their mortgage payments. In a press conference announcing the action, Harris called it "work that will bring justice to many homeowners in California who were targeted by predators who happened to have a law license."

Stein, who signs e-mails with a picture of a Doberman pinscher, claims that he is "Bank of America’s biggest nightmare" and that Harris' suit puts struggling homeowners at risk.

He points out that Harris received four donations in February, totaling $1,500, from attorneys with the law firm representing Bank of America.

Stein's recent lawsuit accuses Harris of doing the bidding of Bank of America by removing "the superstar who had been beating the bank to a pulp for two and a half years."

Shum Preston, a spokesman for Harris, called the suit frivolous.

"We respectfully decline to address the very strange claims made in this lawsuit," he said in a statement. "It is, sadly, another example of what we uncovered during our investigations: false promises designed to lure already distressed homeowners into paying money to lawyers who refuse to properly represent them."

A Bank of America spokeswoman declined to comment.

Stein's office sent e-mails to clients like Hosking asking them to show up at a court hearing to support Stein "in the fight against bank and government corruption."

His firm sent out a press release that said hundreds of homeowners would gather in solidarity with the Occupy Wall Street movement and "against Ms. Harris' support of the 1%."

Meanwhile, the State Bar of California obtained a court order stating that Stein "has become incapable of devoting the time and attention to ... his law practice" and authorizing the bar to seize his files and freeze his bank accounts.

Stein, however, maintains the order doesn't apply because it names Mitchell J. Stein and Associates and not his newer partnership, Mitchell J. Stein & Associates LLP. For the same reason, Stein's website states, "this law Firm has never been sued by the State of California."

Stein is also trying to stop seizure of his assets through his Florida bankruptcy proceeding.

The state bar notified Hosking that she could pick up the confiscated files relating to her, but she would have to find another lawyer.

Hosking keeps getting solicitations promising to save her house if she pays a fee.

"There are all kinds of preying people out there. I don’t know who to trust anymore," she said.

The state bar will work to return money to alleged victims from Stein's frozen funds, said Suzan Anderson, an attorney for the bar. Authorities also are encouraging banks to give a break to people like Hosking.

"Right now, the attorney general and the state bar are discussing with the lenders how they might be able to put a hold on any foreclosures because of these actions and maybe work with the people and give them time," Anderson said.

Will Evans is an investigative reporter for California Watch, a project of the non-profit Center for Investigative reporting. Find more California Watch stories here.