FTC settles civil charges against Sevastopol financier behind student loan program
The Federal Trade Commission has settled the civil charges against a man from Sevastopol who orchestrated a scheme that defrauded about 40,000 borrowers of tens of millions of dollars student loans, the agency said Thursday.
The order, signed Tuesday by U.S. District Judge Saundra Brown Armstrong in Oakland, permanently bars Brandon Frere, 43, and his Rohnert Park companies from providing debt relief services of any kind. and prohibits them from violating federal telemarketing regulations.
Brother must also pay at least $ 324,749 in federal and state tax refunds to the FTC, according to the order.
In its February 2018 complaint against Frere, the FTC alleged that he and his businesses charged borrowers hundreds of dollars in illegal upfront fees to enroll them in a federal student loan assistance program. They also charged consumers up to $ 1,200 for a “financial education” program, followed by additional monthly payments for their entire student loan, typically lasting 10 to 25 years.
In July, in federal court in San Francisco, Frere was sentenced to 42 months in federal prison after pleading guilty to criminal charges of wire fraud and money laundering in connection with the scheme.
Frere admitted in his plea agreement that he defrauded borrowers of $ 25 million to $ 65 million between January 2014 and November 2018, according to the U.S. prosecutor’s office. A hearing is scheduled for Dec. 18 in the San Francisco criminal case to determine how much restitution Frere owes to the borrowers he defrauded.
His criminal defense attorney, Ed Swanson, did not respond to a phone message left for him on Thursday.
Frere owned and operated three Rohnert Park-based financial services companies – Ameritech Financial, American Financial Benefits Center, and the Financial Education Benefits Center – which sold “document preparation services” to those applying for federal student loan remission, a loan consolidation or reduced payment. programs.
According to prosecutors, Frere has instructed his employees to use deceptive sales tactics to unwittingly enroll customers in additional financial services programs and to mislead borrowers about companies’ ability to reduce their repayments. student loans.
To cover up the money earned from the scheme, Frere transferred funds to overseas bank accounts from 2015. He continued to do so in August 2017, after being involved in a dispute with the FTC and having fears that the commission or a court will seize money in its businesses. , according to prosecutors.
Federal agents arrested Frere on December 5, 2018 at San Francisco International Airport as he attempted to board a flight to Cancun, Mexico, and was formally charged on October 1, 2019, with crimes related to the student loan program.
You can contact editor Ethan Varian at [email protected] or 707-521-5412. On Twitter @ethanvarian