Connecticut is suing a Nevada-based residential mortgage financing company, claiming its Milford office raided a competitor's employees and secret documents.

"Systematically recruiting for the purpose of destroying a competitor's ability to do business in the marketplace is an unfair trade practice," and violates state law, Attorney General Richard Blumenthal said Tuesday.

According to Blumenthal, CTX crossed the line separating a tough competitor from a lawbreaker when it recruited Danbury Mortgage employees to bring with them computer lists and other documents. CTX, which Blumenthal said opened a Danbury office staffed by the former Danbury Mortgage workers, used that information to recruit customers from its competition.

Blumenthal and Department of Consumer Protection Commissioner Edwin R. Rodriguez filed the lawsuit against CTX Mortgage Co. in Hartford Superior Court. In addition to stopping the company from repeating the violation, Blumenthal said, the suit is intended to force CTX to surrender profits gained from its alleged actions against Danbury-based Charter Oak Lending Group LLC. He could not estimate how much money might be involved but said hundreds of customers were affected. Some of those customers' mortgage applications were switched to CTX, then closed at higher rates than negotiated with the original company, which does business as Danbury Mortgage, Blumenthal said.

A representative from Charter Oak, which also does business as Greater Fairfield Mortgage, did not return a call for comment Tuesday.

In an e-mailed statement, CTX, a division of Dallas-based homebuilder Centex, wrote it was "surprised and disappointed" by the suit.

"We are confident that when the Department reviews and fully understands all of the facts and circumstances surrounding the matter, it will agree that nothing improper occurred. CTX is proud to be in the Connecticut marketplace, and is a firm believer in fair competition," the e-mail stated.

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