California attorney general alleges that lawyers and telemarketers defrauded desperate homeowners

The California Attorney General’s office has
filed a complaint against Mitchell J. Stein — who was featured in a Sharesleuth
in 2008 — alleging that he and others participated in a scheme to deceive desperate homeowners into paying thousands of dollars each to join dubious lawsuits against their mortgage lenders.

According to the complaint, the lawyers and telemarketers involved in the scheme led the homeowners to believe that the suits would halt foreclosures on their homes, reduce their loan balances, bring them financial settlements, and possibly eliminate their mortgages entirely.

Authorities say the ring solicited homeowners in 17 states and persuaded at least 2,500 of them to pay as much as $10,000 each to join suits, some of which were never filed.

Stein, a Californa-based lawyer, was involved in the creation and development of Recom Managed Systems Inc., a medical device company that went public through a reverse merger. It later changed its name to Signalife Inc., and is currently known as Heart Tronics Inc. (Pink Sheets: HRTT.PK).

The attorney general’s office said in a press release that all of defendants had their assets seized and were enjoined from continuing their activities.

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