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Home appraisals are an essential part of the home buying process. An independent appraisal is a safeguard for both the purchaser and the lender – it is an unbiased look at the value of a property.

What happens, though, when you corrupt the process? What if a builder works in cahoots with a mortgage company who, by the way, owns an appraisal service?

If you read our lawsuits against home-building giant KB Home, Countrywide Mortgage and its appraisal subsidiary LandSafe, you will see that consumers – homebuyers – suffer.

For the past several months our firm’s kept a close eye on KB Home, specifically its lending and sales practices, and uncovered what we believe to be widespread fraud in Arizona, Nevada and California. Our suit contends the trio conspired to inflate appraisals, rig home values and allowed their partner, Countrywide to place homeowners in loans they didn’t qualify for and can’t afford.  

The suit includes a list of tactics the group used to deliver predetermined appraisal values, including blatantly falsifying sale prices for comparable properties, using comparable properties that were as much as 10 miles away, and citing comparable properties that were in other planned communities.

When homeowners unknowingly overpay for their home they are under water from day one and the ramifications are long lasting and extremely damaging. Many don’t find out the extent of the damage until loan payments become too burdensome or they try to sell and realize they won’t be able to repay the loan through a sale based on an accurate and lower appraisal.

Since the announcement of our cases, we’ve heard from homeowners in these areas – all who are rightfully concerned about their homes and their loans – and the overwhelming response is a feeling of despondency that KB Home and Countrywide, companies they trusted, would so blatantly manipulate them for the sake of a sale.

Recently our firm’s taken on a large number of real estate focused lawsuits as the housing market started to collapse in 2006. This is the second lawsuit involving KB Home and the fourth naming Countrywide and LandSafe.

In the past two years, we’ve all learned a great deal about the distance both individuals and corporations are willing to go for the sake of profits. In our eyes, it’s appalling. These practices hinge on lies, corruption and collusion and ultimately end up hurting many.

KB Home rigged home values and as a result, lawsuits are now expanding into other areas. We believe we’ve just hit the tip of the iceberg with KB and will continue to investigate operations in other markets.

For now, we encourage any KB homeowners out there to share information about these lawsuits with friends and neighbors. We welcome your thoughts and comments here on the blog and encourage you all to visit the case page at www.hbsslaw.com/KBHomes.

As the cases progress and we begin new investigations, we’ll keep you updated.

This year the University of Washington men’s basketball team brought a renewed sense of hope and excitement to the dismal Seattle sports scene. The PAC-10 champs made it into the March Madness dance seeded fourth in the country and traveled to Portland to play. As you can imagine, tickets sold like hot cakes to UW fans throughout the region.

To get those tickets, fans had to go through Ticketmaster and anyone who’s purchased a ticket through the ticket sales giant knows the process can be frustrating. Either tickets sell out in five minutes, the site crashes or you have to enter a lottery and pay for the chance to win tickets.

About a year ago, we started hearing from upset Division One basketball fans who paid to enter ticket lotteries, didn’t win tickets, and never saw a refund for the fee. At a quick glance, it seems like the typical frustrating process to get tickets. Dig a little deeper and you see a double-team effort by Ticketmaster and the NCAA to boost profits and for a while, both organizations got away with it.

Yesterday, Ticketmaster agreed to settle a lawsuit our firm filed last May and handed back application fees to those who didn’t win the chance to get tickets to the NCAA 2009 men’s basketball tournament.

Our original suit claimed both organizations ran the scheme for several years. Only after further discovery in the case, we learned Ticketmaster participated in part of the lottery and only for one year.

The NCAA on the other hand has a much larger issue to face. The organization has not settled and our case continues to move forward.

In the lawsuit, we contend the NCAA allows fans to pay several application fees to increase their chance at winning tickets. Unfortunately, Ticketmaster and the NCAA operate in states in which lotteries are illegal unless run by the state or licensed charities. These organizations don’t fall into either of these categories.

In what we see as a foul play, NCAA appears to have changed its ticketing policies listed on its Web site. The site now indicates that the NCAA reversed course and doesn’t allow multiple entries for ticketing lotteries. If a fan doesn’t win, they receive a full reimbursement of their application fee. There’s been no official announcement from the NCAA and our guess is the organization hopes the change goes unnoticed.

We believe both organizations know the scheme harmed fans and this first settlement against Ticketmaster bodes well for those fans. 

We’ll keep you posted on this case and invite you to check out the case page where you can review court documents and press releases.

We’d also love your thoughts on the Ticketmaster settlement and case against the NCAA – what do you think of the practice? Is a ticket lottery fair in some circumstances?

Billie Jean King, a pioneer in women’s tennis once said ‘pressure is a privilege.’ Although she was speaking to her first match in the U.S. Open, the idea is transferable across many industries, including our real estate market. 

Those in the real estate world are certainly feeling the pressure and I bet most don't consider it a privilege. Take the recent tragic news from Virginia, where the CFO of Freddie Mac decided to take matters into his own hands. It's a somber and tragic reminder of how burdensome our current financial crisis has become.

But those at the top aren't the only ones feeling the weight, the pressure trickles down to lenders, appraisers, real estate agents and homeowners. For the past year and a half, we've been hearing from these people - our friends and neighbors. Many forced to make gut-wrenching decisions about their homes and livelihoods while under unimaginable pressures.

The home appraisal industry is one where we've seen a lot of ill behavior lately. Big lending companies like Countrywide, Wells Fargo and Bank of America use market share and power to strong-arm appraisers into inflating home values. Then if these independent appraisers refuse, many find themselves on a blacklist and lose a significant portion of their income.

Homeowners have suffered from this scheme as well. If the appraiser inflates the value of the home per the request of the lending arm, the unsuspecting homeowner finds themselves attached to a 30-year loan and paying a mortgage on inflated numbers.

Has anyone's homeownership dream ever included paying inflated fees or trapping themselves into a mortgage they can't afford?

Of course not, but the motivation of the lending giants has nothing to do with helping to fulfill a dream. We think their world is all about profits, profits, profits.

There are many pressures at the top of this world - satisfying board members, shareholders and CEOs by driving in profits and at any cost. We've all seen the effects of this pressure - whether it's a large financial institution filing bankruptcy, significant layoffs, or suspending 401(k) matches, the pressure of sustaining inflated profits has finally collapsed in on itself and now many are left out to dry.

Pressure is a privilege and frankly the more responsibility we have, the more problems we have to deal with - that's no secret. What is so distasteful is how we got ourselves into this mess in the first place.

Kerry Killinger at WaMu knew the loans customers received weren't good, as did Angelo Mozilo at Countrywide - these are former CEOs of major companies, responsible for billions of dollars in profits. I hope they knew right from wrong. But from their actions, I can't be sure. It seems like these folks simply chose to ignore customers for the sake of their mantra "profits, profits, profits."

Sure, the current economic crisis erupted for many reasons. However, the few at the top had the power to guide the market. Unfortunately, they chose to place self-interests ahead of the interests of millions and here we are - feeling trapped beneath the pressure of a failing economy, guising our fear with hope, hope that soon this will all come to an end.

In the meantime, private litigation is a route for homeowners and appraisers seeking recovery and assistance. Our firm has several active cases and investigations, listed below, and we invite you to review and contact us if you have questions or want to join a case.

 Homeowner Cases:

• Countrywide - claims homeowners unknowingly pay inflated fees for appraisal work through Countrywide and appraisal partner Landsafe.
• Wells Fargo - claims homeowners unknowingly pay inflated fees for appraisal work through Wells Fargo and appraisal company Rels Valuation.

 Appraiser Cases:

• Countrywide - claims the company forces appraisers to inflate appraisal values, if they refuse appraisers find themselves on a blacklist, denied future work. This suit includes work appraisers have done for Landsafe.
• Wells Fargo - claims the company forces appraisers to inflate home values, if they refuse they find themselves denied future work and on a blacklist. This suit includes work appraisers have done for Rels Valuation.

 Active Investigations:

• Bank of America - We're investigating claims Bank of America conspired with Lender Processing Services to overcharge homeowners for appraisals. The scheme, if proven true, places big profits in the companies' pockets and increases fees to homeowners.
• Countrywide Predatory Lending - We're investigating several claims against Countrywide and how the company steered customers into bad loans or penalty fees.
• KB Home and Countrywide - We're investigating claims that KB Home had agreements with Countrywide Mortgage and its appraiser, Landsafe, to inflate the appraised value of KB homes to meet contract prices. We believe some homeowners may have paid as much as $50,000 above the actual value of their home.

In harsh economic times, meeting the bottom line often means letting employees go despite years of loyalty. It's not intentional. It's business - and these days it's harder and harder for managers to make ends meet without handing out pink slips.

However, often times these layoffs are intentional. From a business standpoint, older workers tend to cost employers more money - in terms of salary and benefits. That's why older employees find themselves on the chopping block when employers start giving the ax to meet operating goals.

Older employees are not taking too kindly to the layoffs as these days replacement positions are harder to find. A story in the Wall Street Journal shows that according to the federal Equal Employment Opportunity Commission (EEOC), age discrimination claims are at a record high, reaching about 95,000 in 2008. That is a 15 percent increase from 2007.

Fortunately for older workers, these age-based practices go against the Age Discrimination Employment Act of 1967, which protects individuals who are 40 years old and above from any kind of employment discrimination based on age.

There is also a 2005 Supreme Court decision that broadened the interpretation of age discrimination to include cases where there was no evidence of intentional discrimination. This set of laws protects employees who are 40 years old or older and often prevents companies from widespread age bias - but not enough. 

A recent article in Business Management Daily shares the plight of George, a man in his 60s who worked as CFO of a shoe import company. When management tried to terminate George, he proactively volunteered to take a steep pay cut. Unfortunately, the company still terminated his employment. It was not until later he learned that his replacement was younger and given a higher salary than his counter offer.

This is an instance where George can turn to private litigation. For businesses, it's increasingly important to be careful with HR practices and watch for older employees offering to take pay cuts. This can be an alarm for an impending suit, and nowadays private litigators are watching.

Here's the typical process for someone filing an age discrimination claim. Let's say our friend Bob losses his job and files a claim against his employer. Once filed, the EEOC has 180 days to investigate. If the agency finds merit in the claim, officials usually try to reach a voluntary settlement with the employer. If no settlement is reached, the EEOC or Bob can file a separate suit - in comes private litigation.

In fiscal 2008, the EEOC filed 290 lawsuits, resolved 339 lawsuits and resolved 81,081 private sector charges.

This past Sunday the New York Times broadened the discussion in its Room for Debate column. What about those older Americans who don't have jobs or have been struggling to find something for years? Unfortunately, there aren't any laws that protect the older, wiser bunch from not being hired for a position.

According to the Bureau of Labor and Statistics, those 45 or older, who are already unemployed, were out of work for more than 22 weeks in 2008. In comparison, younger workers faced 16.2 weeks of unemployment.

What are your thoughts? What are you seeing in your workplace or amongst your friends that raises alarm?

As a dad of three, there are many things I worry about on any given day. Like every parent, my kids are the most important thing in the world to me and my wife, and we want to protect them – it’s instinctual.

When they were younger, we worried about things like toy safety, if they were watching too much TV, or exposed to too much violence in movies. As they get older, our worries changed to things like sports injuries, driving and getting accepted into good colleges.

None of this compares to the amount of worry a group of parents has in northwestern Indiana – their concerns are much more basic, and much more terrifying: whether the air their kids are breathing is safe, or slowly poisoning them.

The air in Lake County Indiana is among the worst in the nation. The area is home to steel mills and refineries that emit toxic chemicals into the air on a daily basis. The effects on children of breathing in these toxins can be cancer inducing. One parent finally tired of letting local companies foul the air, putting his kids at risk. He turned to a local law firm and had a straightforward request – he wants our help to fight these companies and find a solution that both better protects children and educates the community about the dangers of toxic air.

As a parent, one thing I know is certain - parents will do anything to protect their kids.

So we joined with the local firm and filed a lawsuit in Gary, Indiana that names the area’s largest emitters of toxic chemicals as defendants – United States Steel and ArcelorMittal USA among many others. We claim these companies knowingly put children and the community at risk every time they release toxic emissions into the air. We believe these companies have an obligation to warn local residents of the dangers and provide health monitoring to ensure these kids lead long, healthy lives.

USA Today ran a series of reports on air quality around our nation’s schools after working with the Political Economy Research Institute. The reports indicate schools in East Chicago, Indiana are in the first percentile of the worst air quality nationwide. The remainder of Lake County falls in the sixth percentile or higher.

This study shows that children in Lake County are at an increased risk of developing such diseases as cancer and asthma in the future because of bad air quality.

In addition, exposure to these chemicals can result in:

• Mental and emotional problems
• Damage to developing lungs and other organs
• Slow, clumsy body movements
• Lead poisoning from the toxins in the air
• Reading disabilities
• Behavioral problems - ADD or ADHD
• Damage to the kidneys

While it is possible that consequences, symptoms or side affects of breathing the polluted air may take decades before showing up, this is an issue we can, and should, fight right now. We can protect hundreds of children in the Lake County area from unnecessary and unfair health problems simply because they live and attend school near manufacturers that spit out toxic air.

We’ll continue to keep our Web site and blog updated on this case. In the meantime, if you’re a parent in Lake County you can call our firm or e-mail us at lakecounty@hbsslaw.com to learn more about this lawsuit and what it means for you and your children.

Shame-based punishment is a strategy that dates back to the 16th century. Thieves or petty criminals were routinely put in stocks and placed in the town square, receiving their comeuppance in the form of verbal ridicule, scorn, and most likely rotten vegetables. That’s the origin of the term laughing stock.

While this form of punishment worked for some, our predecessors found that this punishment only worked on those who cared about their public image. If you had no shame, verbal slings and arrow carry no weight. I think that is the case with General Motors CEO Rick Wagoner.

Earlier this week, President Obama told Wagoner it was time to pack up and go, and go for good reason.

Since Wagoner took the wheel at GM, he’s driven the stock from around $70 a share to under $3, even with car sales at record highs about four years ago. He’s allowed GM’s market share to wither from 28 percent to 22 today, in part by a head-scratching move to push SUVs and big trucks while others were backing fuel economy and hybrid technology.

So it is no wonder why POTUS handed him walking papers as a condition of U.S. taxpayer support. Many believe Wagoner should have had his key to the executive washroom revoked long ago.

Now we are learning that the GM board is on the hook to pay Wagoner more than $20 million in deferred compensation and pension benefits. Perhaps the board was obligated to pay him the money as part of his employment contract, but that does not take away the sting. It doesn’t sound like the public’s hue and cry are having any impact on Wagoner’s conscience either, unlike his brethren at AIG who succumbed to public pressure and returned the cash.

I have a suggestion for President Obama, and one that could save taxpayers billions moving forward, and it involves taking a lesson from Japanese industry. As most students of business know, Japan has had a long history of lifetime employment. When you accepted a job at, say, Mitsubishi, as long as you worked hard, you could expect to hold your job through retirement. Layoffs and terminations were rare until recently.

So what happened at Mitsubishi when an employee repeatedly fouled up, perhaps losing market share, or making decisions that drove stock price down? The company could not fire the person, but they could make them members of the Madogiwa Zoku – The Window Seat Tribe.

Traditional Japanese offices use open-floor designs with most important folks sitting in the center, where all the important activity happens. Rather than getting the ax, poorly performing workers were given ‘window seats’ with little or nothing to do; they sit idle, staring out the window, forced to reflect on their superfluousness. Some quit in shame, others ride the desk until retirement.

So the next time President Obama needs to cut some deadwood out of the executive suites at the automaker, I say don’t fire them and let them cash out. Simply usher them to their new spot next to a window in the lobby, perhaps facing the empty employee parking lot where they can spend the term of their employment -- Think of it as a combination of the Stocks and The Window Seat Tribe.

All day today, I heard news reports about Bernie Madoff admitting to the court that, yes, he did run a Ponzi scheme of epic proportions that sucked something like $50 billion out of the accounts of New York investors, the retirement accounts of Floridians and the endowments of dozens of schools up and down the Eastern seaboard.

Today, the Madoff scourge reached the distant quarters of the verdant Pacific Northwest.  

Late yesterday, we filed a case in US District Court against Bernie, on behalf of John Dennis. Dennis did not do business directly with Madoff, instead he wrote checks to a local outfit here, FutureSelect Prime Advisors II, LLC. That is where the story gets interesting. 

When Dennis agreed to put his money with FutureSelect, he agreed to a deal that is common with wealth-management firms -  he agreed to pay the fund's general partner, Ron Ward, a fee of about 1.5 percent to manage his cash.

Most reasonable folks would think that giving up 150 basis points a year would buy you something, and with most wealth-management companies it does - it buys you access to deals you normally wouldn't see, and it buys you the peace of mind that a seasoned financial pro is sifting the good deals from the bum deals. In legal terms, this is called due diligence.

According to our suit, though, Ward did little on the due diligence side. In fact, it appears to us that Ward simply bundled our client's money and shoveled it over to Madoff through an intermediary. Not a bad job: put the checks in an envelope, lick the stamp and keep a point and a half for the trouble of walking to the post office. 

We all know what happened, though. Madoff took the money and never invested it.

According to our suit, Ward and his firm fed the funds up to another "feeder firm" called Tremont, which is owned by Oppenheimer, one of the big players in the investment world. In a separate action, we are suing Tremont on behalf of other clients, alleging the same thing - they took investor money, cut off a little piece for the trouble, and with little or no due diligence gave it to Bernie.

As the Mob used to say back in the 1930s, everybody got their beak wet - Ward, Tremont, Oppenheimer, and of course, Madoff.

Everyone in the chain was happy to take the money and move it along. But it appears to us that no one took the responsibility for due diligence seriously, and that is wrong.

We all know the consequences. Our client invests his money in Seattle with a small, obscure wealth management guy in the hinterlands of the Pacific Northwest, and before you know it, he's in a club with the likes of Steven Spielberg, Zsa Zsa Gabor and the trustees of Bard College.

Former KB Home CEO Bruce Karatz and Martha Stewart don't seem like they have much in common aside from company's partnership that features Martha inspired designs in various KB Home communities.

Unfortunately for Bruce - he may share more in common with Martha in coming days. Similar to the plight of the domestic goddess, the former CEO of KB Home may soon add jail time to his public resume. Karatz faces 415 years of potential jail time after an indictment last week for allegedly obstructing justice and fudging financial statements to the SEC.

To add to the KB Home drama, this week our firm announced an investigation into KB Home on behalf of homeowners. We believe KB Home worked with Countrywide to significantly overcharge customers through inflated appraisals.

We've heard that KB Home had secret agreements with Countrywide Mortgage and its appraiser, LandSafe, to inflate the appraisal value of KB Homes' houses to increase profits for the homebuilder. According to some reports, this alleged scheme caused homeowners to pay inflated home prices, in some cases $50,000 or more than the home's actual value.

In this fragile economy, we think the idea of home and lending companies conspiring behind closed doors is reprehensible. We strongly believe that as advocates for victims of fraud, we must continue to be vigilant, and hold those who prey upon consumers accountable.

Hagens Berman Sobol Shapiro is interested in hearing from homeowners who believe they may have overpaid for their KB Home. Currently KB Home operates in the following states: California, Nevada, Arizona, Colorado, New Mexico, Texas, Louisiana, Florida, Georgia, South Carolina, North Carolina, Illinois and Wisconsin.

If you bought a KB Home and feel that you may have overpaid, we would like to hear your story. You can e-mail your information to kbhomes@hbsslaw.com or click here.

We will update our Web site and blog as the investigation progresses.

For many, the American dream looks something like this – a home, a respectable job and a healthy family. Nothing extraordinary or above reason. Unfortunately, this simple dream is drifting farther away from people everyday.

As unemployment rates continue to rise, homeowners are having a particularly rough time. Unfortunately, now there’s a new bully showing its face.  

The home appraisal process.

It’s a necessity for anyone purchasing a home and an opportunity for money-hungry companies to hide unsavory practices behind the complexity of the transaction and make a pretty penny while doing so.

After learning from many sources that corruption may be rampant in the home-appraisal process, our firm started to investigate appraisal companies across the country. Our top concern right now – homeowners. We believe this group takes the brunt of the alleged scheme and many from what we’ve heard are completely oblivious to it.

The situation looks like this: Sally wants to buy a home and uses the appraisal company her lender recommends - we’ll call this company X. Company X then outsources the work to an independent appraiser. This person does the work and company X bullies them into accepting a below market price for their work. Company X then turns around and charges Sally a highly inflated fee for no work completed on their end.

Multiply this scheme by hundreds of thousands of home appraisals in a year, multiplied by many appraisal companies throughout the country and you get a lot of homeowners wrongly targeted by these companies merely as a means to increase profits and line the pockets of executives.  

It’s no secret the real estate market is in shambles and we know homeowners have enough weight on their shoulders without having to worry about who’s on their side and who’s trying to pull a fast one.

We want to hear from homeowners. If you purchased a home and went through the home appraisal process in the past few years please contact us.

Where you live and what company you used doesn’t matter. While reports indicate the practice may be prevalent, the good news is the number of homeowners affected far outweighs the number of appraisal companies – giving you, the homeowner, strength in numbers.

Please contact our firm through our Web site, e-mail homeowners@hbsslaw.com or join the investigation. We’re happy to offer our thoughts on your course of action and what steps we can take together to begin restoring your family’s dream.

I'm no art expert, but in my limited understanding of Impressionism, the painter traditionally uses short, broken brush strokes to create intensely vivid portraits that are beautiful standing from 20 feet away. From a closer vantage point, that same painting seems more like a crazy mix of random, yet colorful brush strokes, melting together with no particular rhyme or reason. 

Like a Monet painting, before the subprime meltdown and financial crisis, home lending appeared powerful and invincible from afar. Homeowners received generous and flexible loans and home sales climbed steadily, as did homeowner's perceived equity. 

Fast forward a year, take a few steps closer, and the true colors of the industry begin to separate, unraveling to show the true colors of what we allege is a web of deception concealing fraud and unsavory practices from customers, homeowners and others in the home lending industry.

In the past year, we've filed several lawsuits against title and escrow companies, home lenders and financial institutions. Whether the claim is pushing homeowners into dangerous loans, double charging homebuyers with escrow fees or wrongfully inflating appraisal fees, it all falls in the same bucket - corruption, which damages not only the market, but also individuals and families across the country.

One of the larger alleged schemes we uncovered involves several of the nation's largest title and escrow companies. Over the course of several years, companies like Chicago Title Company, First American Title Insurance, Fidelity National Title Company and Old Republic Title and Escrow have used a captive reconveyance scheme, among others, to take advantage of home purchasers, or those refinancing their homes, our suit claims.

Countrywide's also come under intense scrutiny and legal pressure during the past year. At HBSS alone, we filed four significant cases against the lending giant. Allegations range from predatory lending, illegally blacklisting independent appraisers, ERISA violations with the company's 401(k) plan and significant damage caused to plan participants. The most recent case involves the alleged inflation of appraisal fees.

In a lawsuit filed last week, we contend Countrywide rigged the appraisal process in an attempt to boost profits at the expense of homeowners and third-party appraisers. We believe this scenario played out in cities throughout the country, totaling hundreds of millions of dollars in excess profit for the lending giant.

The unfortunate truth is we don't think this practice ends with Countrywide. In addition to our lawsuits against Countrywide, we're also investigating Wells Fargo and Rels Valuation for the same deceptive practice.

If you purchased or refinanced your home through Countrywide and LandSafe recently, you can join the suit. Or if you want to learn more about our Wells Fargo investigation, you can go to www.hbsslaw.com/WFCappraisals for information. 

With record numbers of home foreclosures, companies dissolving and unemployment on the rise, times are tough for most Americans.

The role of private litigation can lend a hand during these arduous times, working towards change that benefits everyone. By changing the corrupt practices of big business, holding CEOs accountable for irresponsible lending and guiding a path for homeowners, there is some good that can come out of all this.

Once the dust settles, perhaps the real estate industry should turn its back on Impressionism and pursue Realism.

Business etiquette says you deliver on what you promise. That's a given, regardless if you are the corner dry cleaner, or a multinational company. That is also true if you are the U.S. government, in charge of issuing passports.

For anyone who's tried to organize a big family trip, the process can be chaotic. If your planning is anything like mine, you are scurrying to find the kid's swim trunks, while making lists to remember the charger for your cell phone. Things fall through the cracks, and for many folks, checking to make sure passports are in order can be one of those things.

Add to that, new laws that mandate a passport for places a driver's license once worked - like Canada, Mexico and the Caribbean - and you can see the problem that many travelers faced.

To meet traveler's demands, the State Department offered travelers a rush option. If you were in a big hurry, Uncle Sam promised he could expedite your passport processing, but only if you were willing to pony up an additional $60 above the $85 -$100 standard processing fee.

But for parents faced with the anguished screams of a 5-year-old when he learns his trip to swim with the dolphins at The Atlantis Resort was being replaced with a trip to the Wisconsin Dells, $60 a pop looked to be a bargain.

At least, that is how it was supposed to work...

In Aug. 2007, we filed a class-action lawsuit on behalf of travelers who say the State Department took their money, and failed to live up to the promised three-day turn around.

One of our clients saw she needed to renew her passport. She had about two months before her trip, but decided to play it safe - she paid the expedite fee, and sent her application using an overnight courier. She also pre-paid to have her passport returned to her using a similar overnight service.

More than six weeks later, nothing had arrived. In her case, she was able to salvage her trip, but she had to travel to the closest passport office, take a number, wait in line, and plead her case to the staff person seated securely behind the bulletproof glass.

She was lucky - we've heard from many others that had to postpone or cancel trips.

We contend, in our suit, that the government failed to adequately prepare itself, even though the State Department knew that there would be a huge demand for services with the adoption of the new rules.

We're working to recover all rush fees lost by travelers. This includes all overnight charges or special delivery fees travelers paid to speed up the process. Our suit claims the State Department violated its contract with millions of people and has chosen not to issue refunds as the contract clearly spells out, but instead impose a cumbersome process that is unnecessary and designed to deter refund requests.

We'll continue to keep you posted on the suit and its status. For now, you can read the complaint and more about the case at www.hbsslaw.com/passport. We encourage anyone who had passport issues to join the case. As of now, the class period dates back to August of 2001.

Happy traveling - if you have your passport!

Persuasion is a funny thing.

On one hand, I can't talk a flight attendant into giving me an extra packet of peanuts. On the other, a New York con man convinced thousands of wheel-healed investors to give him billions of dollars to invest.

The Bernard Madoff story is a tragic one - he allegedly defrauded thousands of investors out of billions of dollars, but how did he do it? How did he dupe so many investors, for so long?

Enter Julius Henry Marx, better known as Groucho Marx. It was Marx who said: "I would never join a club that would have me as a member."

Therein lays the magic behind Madoff's power of persuasion, or more accurately, deception. He successfully played off investors' desire to be a part of something they perceived to be bigger, better and smarter. 

That's what Marx points out - to some degree everyone is driven by a desire to be included, and that's what Madoff banked on. He created such a mystique around his operations, such a patina of exclusivity, that when you were invited to join, you jumped at the chance. 

As Jason Zweig points out in his very insightful article in the Wall Street Journal, if you are invited to join an exclusive club "... you do not go rummaging around in the kitchen to make sure that the health code is being followed."

Intelligent investors flocked toward Madoff for fear of being left out. The idea of being handpicked for exclusive "membership" struck a chord, and drove people to decisions they now regret. 

Some media are dismissing this story as ultra-rich folks losing a few million off the top. Sure, we've heard from folks who lost two, five, and even 20 million dollars. But I can also tell you about retirees of moderate wealth, wiped out. One e-mail from this morning told of a 90-year old who has to immediately put his home up for sale - his entire retirement savings were tied up with Madoff.

We are investigating Madoff and his investments and invite any investors to contact us. We'll keep you posted on the latest from our camp.

Recently the FDIC released a detailed report on overdraft fees and banking practices in this country and the findings are surprising.

Before we delve into the report and my thoughts on the matter, here's a hypothetical question. If a credit card company approached you and said you can borrow $20 right now, right this very second, but the APR is going to be 3,000 percent. How many of you would say yes?

The short and only answer is no one.

Unfortunately, when you pay banks a fee for the $4 you overdrew purchasing your morning's latte you are in effect shaking on the proposed deal.

This is one of the many startling figures highlighted in the FDIC report.

These days it is becoming increasingly apparent to me that the banking industry really doesn't value transparency with its clients - at least not more than its amplified revenue streams. In institutions the FDIC examined for its report, overdraft fees provided $1.97 billion in earnings.

Our concern is the average consumer does not know about the different overdraft programs at their bank and cannot feasibly protect themselves from potential schemes.

Take a good look at the demographic these overdraft programs affect -- low-income and young consumers. This group is traditionally composed of repeat offenders. What is truly unsavory in my opinion is that these banks will target repeat offenders time after time for overdraft fees that they can ill afford.

Even more frustrating is that the report indicates 81 percent of banks operating automated overdraft programs allow overdrafts to take place at ATMs and at point-of-sale locations or through debit transactions. Most of these banks only notify customers of insufficient funds after the transaction is already done. Now you, the customer, are overdrawn and owe the bank $27, on average.

To add insult to injury, the bank knew you didn't have the money but wanted the fee, so they let the transaction process.

In what world is this right?

The good news is we can fight back. In October, we filed a class-action lawsuit against Wells Fargo. The suit claims the bank's systematic practice of re-sequencing electronic debit transactions results in excessive overdraft fees to customers.

Here's what that means:

Let's say Bob goes to the grocery story and spends $4.79 on a gallon of milk. His account only has $5.00 remaining after the transaction, but he hasn't overdrawn - good job, Bob.

Bob has two more errands to run - he spends $10 at lunch and then buys some dog food for $17. We see this as Bob made one purchase, which overdrew his account and another when he was already in the red.

What some banks are doing, and we claim Wells Fargo is one of them, is ordering those purchase from greatest to least. Bob had less than $10 in his account at the start of the day. His bank is sequencing his purchases as $17, $10 and $4.79 - that makes three overdraft fees, when in reality it was two.

Multiply this by millions of customers nationwide and you have exponential profit for the bank. The sequencing tactic is one issue included among many in the FDIC report.

While we don't think this issue is going away anytime soon, at Hagens Berman, we'll continue to fight for the consumer. Visit this blog for updates on the FDIC report and our lawsuit.

I encourage you to leave a few comments for us on the report, overdraft fees and what's making you upset.

It is tough to lose your job. Even tougher just before the holidays. But what about losing your job in December, all while your retirement savings is vaporized?

Today, Washington Mutual's new owner, JPMorgan Chase, gave official notice to 3,400 Seattle employees that they are out of a job. Technically called the Worker Adjustment and Retraining Notification Act, or WARN, JPMorgan Chase is required to give these workers a heads-up that their employment in what was the nation's largest savings and loan institution is about to end. Nationally, the number of layoffs is much higher, approaching 20,000.

The layoffs come as no surprise. Once the Seattle institution was gobbled up by JPMorgan Chase for $1.9 million in September, most employees knew that they would be deemed ‘redundant' and would likely be given their walking papers.  

But what was a surprise to many employees was how quickly their 401(k) accounts disappeared, especially after hearing assurances from CEO Kerry Killinger and others within the organization.

Earlier this year, we filed a class-action lawsuit against Washington Mutual on behalf of all employees participating in the company's 401(k) plan. The employees claim that Killinger, the board and others within the company did a horrible job in fulfilling their obligation of protecting the interests of the plan, which according to our complaint, cost the employees more than $150 million in retirement savings.

This is a complicated case. Since JPMorgan Chase purchased WaMu after the thrift was seized by the FDIC, we are dealing with bankruptcy issues, amid other complications. To the thousands of former, or soon-to-be former, employees of WaMu, know that we are fighting this on all fronts. Watch our Web site for more updates. 

Being a lawyer today can be tough, especially for those of us in the Class Action realm trying to redress practices that inflate the price of drugs. I could recite chapter and verse how the Bush administration has worked to try and rob consumers of their ability to seek justice through class litigation but it would only bore you, the reader, and get me all worked up, so I will defer.

But, today is one of those days in which it is all worth it. Today we concluded a case that is a big win for consumers and third-party payers. More importantly, though, we settled a case that had private attorneys not joined the battle, consumers and third-party payers would still be getting the short end of the gavel, if you will.

Today we announced the largest settlement of its kind - a $350 million settlement in a case we filed against healthcare giant McKesson in which we alleged the company secretly and intentionally spiked the wholesale costs of the vast majority of prescription drugs, robbing consumers of millions of dollars.  

You can read more about the case at our site, or check out a few other articles that have hit the streets today.

Why didn't the FTC, U.S. Justice Department or any of the other oversight organizations take this case on? One could argue that they are overburdened; there are too many issues and too few investigators. One could also argue that the current, lame-duck administration was reluctant to dig too deeply in issues that could affect Big Pharma. Take your pick.

What I do know is that if it were not for a dedicated group of clients and attorneys here at HBSS, along with our team of co-counsel, these sorts of deals would still be happening, and consumers would still be paying the price.

Of course, McKesson claims they did nothing wrong, and they settled because of the "uncertainty" with the case. We also heard that from the other defendants that settled as well. Sure, let them say they are blameless. That's fine by us, as long as they agree to make good to those we think they bilked.

At HBSS, monitoring and pursuing action within the pharmaceutical industry is a large part of our practice. Whether it is going after Bayer for misleading consumers through marketing campaigns for combination drugs, or McKesson for artificially raising prices, we argue the role of private litigation is instrumental for change.