A Connecticut mortgage company is accused of illegally recruiting a competitor’s employees to gain access to confidential customer lists, loan applications and referral sources.

State Attorney General Richard Blumenthal and the Connecticut Department of Consumer Protection have filed suit against CTX Mortgage Co., claiming the company violated state law and public policy against corporate raiding and the misappropriation of trade secrets.

Nevada-based CTX allegedly began recruiting employees of Danbury Mortgage at a September 2004 training conference, offering bonuses and other benefits as rewards for former Danbury employees to recruit their former colleagues.

The lawsuit claims CTX opened an office in Danbury staffed entirely with employees recruited from Danbury Mortgage. CTX allegedly mailed postcards to about 1,000 Danbury Mortgage customers and referral sources, informing them that their agents now worked for CTX. The former Danbury agents then told consumers who had loans originated by Danbury Mortgage that their loan would be closed at CTX. In some cases, the lawsuit claims, the switch resulted in higher interest rates for consumers.

The lawsuit seeks restitution for consumers and an order prohibiting CTX from using any consumer lists, files, documents or information it obtained by recruiting Danbury Mortgage employees.

Danbury Mortgage’s parent company is Charter Oak Lending LLC.

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