Consumer Protection

FRESNO – Attorney General Kamala D. Harris today announced the arrest of five individuals who allegedly ran a statewide housing scheme by using adverse possession laws to fraudulently seize at least 23 homes in nine counties.

“It is reprehensible that these individuals lied to the courts in order to steal homes and in some cases to demand payment from the rightful owners,” Attorney General Harris said. “The conduct of the attorneys in this scheme is even more offensive because they violated their ethical duty to be honest to the courts. I am pleased that my mortgage fraud strike force, together with our state and local partners, continue to investigate and prosecute these crimes against our people and our economy."

Sandra Elaine Barton, 30, Christopher Spencer Barton, 31, Daniel Paul Vedenoff, 29, Sheldon W. Feigel, 50, and Craig Merrill Mortensen, 60, all of Fresno, were arrested today and charged with 288 felony counts including perjury, filing false court records and preparing false evidence. Cambria Lisa Barton, 21, remains at large.

All were booked into the Fresno County Jail on bail ranging from $27,500 to $1,795,000 and face restitution payments of at least $3.5 million.

According to the Attorney General’s filing, the Barton family, along with Vedenoff, Sandra Barton’s boyfriend, allegedly worked with two lawyers, Mortensen and Feigel, to identify seemingly abandoned residential properties and file for adverse possession of the property in court in order to obtain title. Once a Barton family member obtained ownership, the property would then allegedly be restored and was typically sold or rented.

Under California law (Code of Civil Procedure 325), an individual can claim adverse possession of real property if he or she has occupied or claimed it continuously for at least five years and paid property taxes for that period of time, among other requirements.

According to the Attorney General’s filing, since 2006, Barton family members and their attorneys allegedly provided factually impossible and knowingly fraudulent evidence and statements in court under penalty of perjury in order to obtain at least 23 residential properties in nine counties. These counties include: Fresno, Kern, Los Angeles, Madera, Merced, Santa Barbara, San Mateo, Sonoma and Tulare.

The alleged scheme was uncovered when Nancy Zelepsky, the true owner of a residence in Santa Barbara County, sought an equity loan in 2010 and contacted a title company in order to determine if there were any liens against her property. Zelepsky was notified that Sandra Barton had been listed as the deed holder of the home in July of that year through documents filed by Mortensen. After seeking assistance from the Legal Aid Foundation of Santa Barbara County, a court determined that Sandra Barton’s prior claim to the property was fraudulent and restored ownership to Zelepsky. The court then notified the California State Bar regarding Mortensen and the California Attorney General’s office opened an investigation in June 2011.

This case was headed by Attorney General Harris’ Mortgage Fraud Strike Force, which was created in May 2011 to investigate and prosecute misconduct at all stages of the mortgage process.

Sandra Barton faces a maximum state prison sentence of approximately 103 years, Mortensen faces 108 years, Feigel faces 15 years, Christopher Barton faces 7 years and Vedenoff faces 8 years.

The Attorney General’s Office was assisted in this case by the State Bar of California, Santa Barbara County District Attorney’s Office, Kern County Sheriff’s Department, Clovis Police Department and Fresno Police Department.

Please note that a complaint contains only allegations against a person and, as with all defendants, those named here must be presumed innocent unless and until proven guilty.

A copy of the Complaint is attached to the electronic version of this release at: oag.ca.gov/news.

SAN FRANCISCO – Attorney General Kamala D. Harris today kicked off Tax Identity Theft Awareness Week by issuing tips for Californians to follow to prevent tax-related identity theft as the annual tax compiling and filing process begins.

Tax-related identity theft increases in January and commonly occurs when:

• Thieves use stolen personal information to file tax returns in someone else’s name in order to obtain a refund.

• Thieves use a stolen Social Security number (SSN) for employment, which may complicate state and federal income tax obligations for the victim.

• Thieves send phishing emails that look like they are from the Internal Revenue Service (IRS) or the Franchise Tax Board (FTB) that ask for personal information or include links to official-looking web sites.

California consumers are urged to use the following tips to better prevent tax-related identity theft:

• Never open an email or a text message that says it is from the IRS or the FTB - they are always fraudulent. State and federal tax agencies never initiate contact with taxpayers by email, text message or social media to request personal or financial information or to send notice regarding audits or refunds.

• It’s fine to show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your SSN.

• While preparing your tax return for electronic filing, make sure to use a strong password. A strong password is at least eight characters and includes a combination of at least three upper and/or lowercase letters, punctuation, symbols and numerals.

• Once you have e-filed your return, save it to a flash drive, CD or similar device and then delete the tax information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe. If working with an accountant, ask about what measures they take to protect your information.

• Use a locked mailbox and don’t leave your mail in it for long periods of time. Take your mail that contains sensitive information (bills, tax returns) to the post office.

• If your SSN is stolen, reference the California Attorney General’s Identity Theft First Aid page for instructions on what to do: www.oag.ca.gov/idtheft/first-aid.

You may have a tax identity theft problem if you receive a letter from the IRS or FTB stating that:

• you filed more than one tax return,
• someone has already filed using your information,
• you have a balance due, refund offset or have had collection actions taken against you for a year in which you did not file a return, or
• you received wages from an employer for whom you have not worked.

If you receive such a letter (not an email) from the IRS or FTB, immediately contact the agency’s identity theft unit:

Internal Revenue Service: phishing@irs.gov

IRS Identity Protection Specialized Unit

1-800-908-4490

California Franchise Tax Board: www.ftb.ca.gov/individuals/id_theft.shtml#ID

ID Theft Resolution Coordinator

1-916-845-3669

Additional Resources:

Internal Revenue Service

Identity Theft web pages:  www.irs.gov/uac/Suspicious-e-Mails-and-Identity-Theft and

www.irs.gov/uac/Indications-your-identity-may-have-been-stolen-and-how-to-report-it-to-us

Franchise Tax Board

Identity theft web page: www.ftb.ca.gov/individuals/id_theft.shtml#ID

California Attorney General

Identity Theft Protection and First Aid: http://oag.ca.gov/idtheft  

Federal Trade Commission

Tax Identity Theft Awareness Week: http://www.consumer.ftc.gov/features/feature-0029-tax-identity-theft-awareness-week 

For more information on how to identify and protect yourself from identity theft visit Attorney General Harris’ website.

SAN FRANCISCO – Attorney General Kamala D. Harris today issued tips for the holiday season on how Californians can protect themselves from identity theft and make the most of their charitable giving.

Tips for safe shopping:

• Review your bank and credit card statements frequently for unusual transactions.
• In the event of a security breach involving your credit card, monitor your account and contact your bank promptly if you see any suspicious transactions.
• If the security breach involves your debit card, the best way to protect yourself is to immediately cancel the card and get a replacement with a different number.
• Don’t make purchases in free Wi-Fi hotspots, such as a coffee shop, which can put your passwords and other information at risk.
• Shop on secure websites. One indicator about which websites are safe, and which are not, is the presence of a yellow padlock icon in the browser bar. Another indicator is ‘https’ in the web address.
• Never send sensitive personal or financial information through e-mail. Legitimate companies will not ask you to do so because it is not a secure way to transfer sensitive information.
• If you are receiving text messages on your cell phone saying you have won a prize or gift card, do not click on the link in the message – it is most likely a scam and may install a virus on your phone.
• Know the return policies of the retailers you shop with before you leave the store or conclude an online transaction. Many retailers will give you a refund if you have a receipt and your return is prompt, but some may only give store credit. Ask a clerk if the policy is not posted at the register.

Tips for donating wisely:

• The best way for many donors to select worthwhile charities is to work with a local charity as a volunteer. This helps provide first-hand knowledge about programs that benefit your community.
• You may want your donation used for a specific program or purpose within a charity. If a website has a “donate” button, check to see if you can designate a specific purpose for your donation. If you can’t, contact the charity to be sure your donation will be spent for the purpose you intend.
• If you are contacted by a solicitor on behalf of a charity, ask if he/she works for a commercial fundraiser and what percentage of donations goes directly to the charity. You may prefer to contact the charity directly to make a donation.
• If you receive an email or text message asking for a donation to a charity, contact the charity directly and confirm that the request is legitimate.
• If a solicitor tells you the donation is for your local police, firefighter or other public safety agency, check directly with the agency to avoid a potential scam.
• Don’t assume that charity recommendations on Facebook, blogs, or other social media have been vetted. Research the charity yourself.
• Make charitable contributions directly on a charity's website. If donating by check, use the full name of the charity rather than initials or an abbreviation. Do not give your credit card number to a telephone solicitor or in response to any unsolicited phone call you receive.

Additional consumer tips, information, and lists of resources are available at:

The California Attorney General’s consumer tips on identity theft and other privacy issues, https://oag.ca.gov/privacy/info-sheets

The California Attorney General’s Guide to Charitable Giving, http://oag.ca.gov/sites/all/files/agweb/pdfs/charities/publications/CharitiesSolicitation.pdf

www.ftc.gov, or toll free nationwide at (877) 382-4357

www.give.org, for additional information about a specific charity

SAN FRANCISCO – Attorney General Kamala D. Harris today announced a $2.1 billion multistate and federal settlement with Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (Ocwen) over alleged mortgage servicing misconduct.

The settlement makes California homeowners eligible to receive up to $268 million in first lien principal reductions and nearly $23 million in cash payments to borrowers.
 
"This settlement will help homeowners who've been misled while trying to modify their Ocwen mortgages," said Attorney General Harris, "But our work isn't done. Too many California families are still ‎coping with uncooperative banks and mortgage service providers. My office will continue to fight on their behalf."

The settlement resolves allegations that Ocwen engaged in robo-signing, “dual tracking” of borrowers seeking loan modifications, and other misconduct in the course of its mortgage servicing activities. The settlement also resolves similar allegations against Homeward Residential, Inc. and Litton Loan Servicing, LP, which Ocwen acquired.

Ocwen holds nearly 390,000 loans in California, of which 12% are underwater. Ocwen holds approximately 6% of all California underwater loans.
 
The national settlement requires Ocwen to pay $125 million to borrowers whose homes were foreclosed between 2009 and 2012 and commit to $2 billion in first lien principal reduction loan modifications over the next three years. The Consumer Financial Protection Bureau was the lead agency for the negotiations. The settlement was signed by 49 states and the District of Columbia, including California.
 
Joe Smith, who served as the Monitor for last year’s National Mortgage Settlement, will monitor the settlement nationally.
 
The Ocwen settlement does not grant immunity from criminal offenses and would not affect criminal prosecutions.  The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases.  The agreement also preserves the authority of state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.
 
In some cases, Ocwen will contact borrowers directly regarding principal reductions. However, borrowers should contact Ocwen to obtain more information about principal reductions and whether they qualify under terms of this settlement. A settlement administrator will contact qualified borrowers associated with foreclosed loans regarding cash payments.

Today’s settlement is the latest in a series of actions taken by Attorney General Harris and the California Department of Justice against bad lending practices in California.

In February 2012, Attorney General Harris secured a commitment from the nation’s five largest banks which has resulted in more than $20 billion for struggling California homeowners. Following the settlement, Attorney General Harris sponsored the California Homeowner Bill of Rights, a landmark package of legislation that restricts dual-track foreclosures, guarantees struggling homeowners a reliable point of contact at their lender and imposes civil penalties on fraudulently signed mortgage documents. In addition, homeowners may require loan servicers to document their right to foreclose. This legislation was signed by Governor Brown in July 2012 and took effect on January 1, 2013.

Most recently, Attorney General Harris announced a settlement with J.P. Morgan Chase & Co. over its misrepresentation in residential mortgage-backed securities sold to California’s public employee and teacher pensions. The terms of the settlement resulted in California recovering nearly $300,000 million in damages.
 
In February 2013, Attorney General Harris filed a lawsuit against Standard & Poors, one of the nation's major credit rating companies, for inflating its ratings of structured finance investments, which caused California's public pension funds and other investors to lose billions of dollars.
 
Created in May 2011 by Attorney General Harris, the Mortgage Fraud Strike Force continues to lead the charge in investigating and prosecuting misconduct at all stages of the mortgage process.

For more information about the settlement, CA Ocwen borrowers can call 1-800-337-6695 and email ConsumerRelief@Ocwen.com. The California Department of Justice also has more information available at oag.ca.gov.

SAN FRANCISCO – Attorney General Kamala D. Harris today announced a settlement with J.P. Morgan Chase & Co. over its misrepresentations in residential mortgage-backed securities sold to California's public employee and teacher pension funds, CalPERS and CalSTRS, between 2004 and 2008.

According to the terms of the settlement, California will recover $298,973,000 in damages.

“JP Morgan Chase profited by giving California’s pension funds incomplete information about mortgage investments,” Attorney General Harris said. “This settlement returns the money to California’s pension funds that JP Morgan wrongfully took from them.”

An investigation conducted by Attorney General Harris showed that offering documents for the securities failed to accurately disclose the true characteristics of many of the underlying mortgages, and that due diligence to weed out poor quality loans had not been adequately performed.

The broader settlement reached today by the United States Department of Justice and other federal and state agencies totals $13 billion, and represents the largest settlement with a single entity in American history.

CalPERS and CalSTRS will be reimbursed through this settlement for losses on investments in mortgage-backed securities of J.P. Morgan Chase or its predecessors Washington Mutual Bank and Bear Stearns.

J.P. Morgan Chase will also provide $4 billion in relief to aid consumers across the country, including Californians, harmed by the unlawful conduct of J.P. Morgan Chase, Bear Stearns and Washington Mutual. That relief will take various forms, including principal forgiveness, loan modification, targeted originations and efforts to reduce blight. An independent monitor will be appointed to determine whether J.P. Morgan Chase is satisfying its obligations.

The settlement related to California’s pension funds arises from the investigation into mortgage-backed securities by Attorney General Harris's Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry. The Attorney General's additional efforts to investigate the mortgage crisis include securing an estimated $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

For more information on the U.S. DOJ settlement visit: http://www.justice.gov/

SAN FRANCISCO -- Attorney General Kamala D. Harris today issued the following statement, following the announcement that California joined with 45 states, the District of Columbia and the federal government in a $2.2 billion settlement with Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, Inc., over allegations of the companies’ unlawful marketing practices, including off-label promotion and kickbacks, to promote the sales of their atypical antipsychotic drugs, Risperdal and Invega.

California’s share of the national settlement is $89 million, which is the largest recovery ever for California from a national civil settlement regarding atypical antipsychotic drugs.

“Motivated by profit, these companies made false claims that jeopardized the health of California’s most vulnerable patients, including children and senior citizens—and left California taxpayers with the bill,” said Attorney General Harris. “Today’s record settlement reinforces the California Department of Justice’s commitment to rooting out this kind of greed wherever we find it.”

As part of this global resolution, the companies have agreed to resolve civil liabilities for their alleged unlawful conduct, which caused false and/or fraudulent claims to be submitted to Medi-Cal and improper Medi-Cal purchases. The complaint highlights practices by Johnson & Johnson and Janssen, including marketing to patient populations (children, adolescents and the elderly) for whom the drugs were not FDA approved and making false and misleading statements about the efficacy of these drugs.

To compensate the Medicaid programs, the companies will pay $1.114 billion as the combined federal and states’ share of the civil settlement for both drugs. After a statutory relator’s share is paid to the whistleblowers who brought the fraud to the attention of the government, the Department of Health Care Services will be reimbursed $44.5 million for losses incurred from the fraud; the remainder will go to support Medi-Cal fraud and enforcement efforts.

In addition, Janssen Pharmaceuticals, Inc. plead guilty to a criminal misdemeanor charge of misbranding Risperdal in violation of the Food, Drug, and Cosmetic Act.  As part of the criminal plea, Janssen has agreed to pay an additional $400 million in criminal fines and forfeitures.

The Attorney General’s Bureau of Medi-Cal Fraud and Elder Abuse investigates and prosecutes claims of Medi-Cal civil and criminal fraud, as well as allegations of elder abuse, such as physical assaults or financial theft.

SAN FRANCISCO -- Attorney General Kamala D. Harris today filed a lawsuit against Corinthian Colleges, Inc. (CCI) and its subsidiaries that operate Everest, Heald and WyoTech colleges for false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.

The complaint alleges that CCI intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs. CCI deployed these advertisements through persistent internet, telemarketing and television ad campaigns. The complaint further alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers.

“The predatory scheme devised by executives at Corinthian Colleges, Inc. is unconscionable. Designed to rake in profits and mislead investors, they targeted some of our state’s most particularly vulnerable people—including low income, single mothers and veterans returning from combat,” Attorney General Harris said. “My office will continue our investigation into the for-profit college industry and will hold accountable those responsible for these illegal, exploitative practices.”

According to Harris’ complaint, CCI’s predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for future.”

According to the complaint, CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame. The complaint further alleges that CCI runs millions of online and mobile ads offering ultrasound, x-ray, radiology, and dialysis technician programs at their California campuses—when, in fact, CCI does not offer those programs. CCI’s call center agents are disciplined if they tell callers that CCI does not offer these programs. Additionally, according to the complaint, CCI includes official Army, Navy, Air Force, Marine Corps, and Coast Guard seals in mailings and on web sites without authorization and in violation of California law.

The complaint alleges that CCI committed securities fraud by reporting a nationwide job placement rate of 68.1% in presentations to investors, when senior executives knew this percentage was false. The complaint describes internal audits emailed to CCI executives that show job placement data error rates between 53% and 70%. The complaint references an email from a CCI executive which explains that in 2011, two Everest College campuses (Hayward and San Francisco) paid a temporary employment agency “to place students to meet the accreditation deadline and minimum placement %.” The complaint also states that CCI double-counted job placements and failed to maintain required records of reported job placements.

According to a recent CCI securities filing, the average tuition for a CCI associate’s degree is $40,000 and the average tuition for an online CCI associate’s degree is $34,000.  The average tuition for CCI’s non-degree healthcare programs is $17,000.

CCI is based in Santa Ana and currently operates 24 Everest, Heald and WyoTech campuses in California, 111 total campuses in North America and three online programs. Out of the 81,000 students who attend CCI colleges, approximately 27,000 (33%) are in California.

CCI is a publicly traded corporation with assets of over $1 billion. Federal funds account for almost all of CCI’s annual revenue.

In July 2013, Attorney General Harris filed a separate lawsuit in Sacramento Superior Court to enforce an investigative subpoena against Bridgepoint Education Inc., operator of Ashford University, as part of an investigation of that company’s practices.

Current or former CCI students who wish to file a complaint can contact the Attorney General’s Office at: http://oag.ca.gov/contact/consumer-complaint-against-business-or-company

Resources for current or former CCI students are available at: oag.ca.gov

A copy of the complaint is attached to the electronic version of this release at: http://oag.ca.gov/news

SACRAMENTO -- Attorney General Kamala D. Harris announced that Larry Harmon, 48, of Granite Bay, was sentenced Tuesday to 16 months for a scheme to defraud the state Board of Equalization out of more than $4.5 million in fraudulent claims for tax returns on defaulted car loans.

The case was referred to the Attorney General’s Special Crimes Unit for investigation after an auditor with the California Board of Equalization (BOE) noticed the suspicious claims. Harmon had submitted thousands of fraudulent requests with BOE that, if successful, would have resulted in losses of more than $4.5 million.

“Defrauding state government is equivalent to stealing taxpayer dollars,” Attorney General Harris said. “I applaud the cooperation between my office and the Board of Equalization to stop this scheme before any losses occurred.”

“Those who cheat and defraud our tax system impose a selfish and unfair tax increase on their fellow Californians,” said Board of Equalization Member George Runner. “It’s only right that they be brought to justice.”

Harmon, who was sentenced Tuesday in Sacramento Superior Court to 16 months in county jail, was arrested in January on 10 felony counts of false claims and forgery. Harmon formerly managed investments for several NBA players, including Carmelo Anthony of the New York Knicks and Ben Gordon of the Charlotte Bobcats.

As owner of Larry Harmon & Associates, Harmon represented financial institutions seeking sales tax refunds from the BOE. A lender is entitled to submit a refund request to BOE when an individual defaults on a car loan and the vehicle is repossessed.

DOJ agents determined that Harmon created fraudulent bank documents and loan papers, along with a shell company called Premier Capital Finance. He submitted these documents to BOE to request refunds for non-existent banks, including Premier Capital Finance. He also fabricated letters from his attorney attesting to the validity of his paperwork. 

At the time of the search warrant and arrest, DOJ and BOE agents discovered additional fraudulent documents that indicated he was in the process of creating two additional false claims, each for more than $5 million.  

The Board of Equalization and the Attorney General’s Bureau of Investigation routinely combine resources to investigate fraud and tax schemes perpetrated against the State of California as part of a joint effort to combat underground economy crimes.

LOS ANGELES -- Attorney General Kamala D. Harris today announced an agreement with Tesoro to preserve California jobs, help protect consumers from gas price spikes, and require environmental retrofitting of the state’s largest oil refinery.

“These commitments will protect jobs for potentially thousands of Californians, ensure that California’s oil and gas markets remain competitive for years to come, and lead to a reduction in greenhouse gases and emissions,” Attorney General Harris said.

Tesoro’s August, 2012 acquisition of BP’s Carson refinery was subject to detailed investigation by the California Attorney General’s Office and Federal Trade Commission.

In a letter to the Chair of the California Energy Commission, Attorney General Harris provides details of the agreement reached between the state and Tesoro, which include:

• A guarantee to preserve more than 1,000 jobs at the Wilmington refinery for the next two years.
• Joint monitoring by the Attorney General’s office and the California Energy Commission of gas pricing, volume and refinery capacity.
• Requirements that Tesoro implement safeguards against price spiking from refinery outages through increased capacity for production from other regional refineries.
• A commitment that Arco stations acquired by Tesoro will remain a low-cost fuel provider for California consumers.
• An environmental retrofit of both the Wilmington and Carson refineries to reduce greenhouse gas emissions.

A copy of the letter is attached to the electronic version of this release at http://oag.ca.gov/news .

LOS ANGELES -- Attorney General Kamala D. Harris today filed an enforcement action against JPMorgan Chase & Co. (Chase) alleging that the bank engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians.

The suit alleges that Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuses against approximately 100,000 California credit card borrowers over at least a three-year period.

“Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Attorney General Harris said. “This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”

From January 2008 through April 2011, Chase filed thousands of debt collection lawsuits every month in the State of California. On one day alone, Chase filed 469 such lawsuits in California. The Attorney General’s complaint against Chase alleges that, to maintain this pace, Chase employed unlawful practices as shortcuts to obtain judgments against California consumers with speed and ease that could not have been possible if Chase had adhered to the minimum substantive and procedural protections required by law.

“At nearly every stage of the collection process, Defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits,” the complaint states.

Chase used California’s judicial system as a mill to obtain default judgments, the suit alleges, using illegal tactics to flood the state’s court system in order to secure default judgments and garnish wages from Californians.

The alleged misconduct includes:

• Robo-signing: Chase illegally robo-signed various litigation filings, including sworn documents, declarations, and verified complaints, without reviewing the relevant files or bank records or even reading the documents before signing.

• “Sewer Service”: Chase failed to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by law. This practice, known as “sewer service,” deprives the consumer of any notice of the lawsuit.

• Filing Irregularities: Chase haphazardly assembled its official legal filings. For example, Chase failed to redact consumers’ personal information in attachments to filings, potentially exposing them to identity theft and in violation of California law. In addition, when asking courts to enter default judgments against consumers, Chase consistently swore under penalty of perjury that the consumers were not on active military duty. In fact, Chase never checked.  This deprived servicemembers of important legal protections to which they are entitled while on active duty.

The suit was filed in Los Angeles Superior Court and a copy of the complaint is attached to the online version of this release at http://oag.ca.gov.

Consumers who believe they have been victims of this misconduct may submit a complaint online at http://oag.ca.gov/consumers.