Wednesday, May 24, 2017

FTC and Florida Halt Massive Debt Relief Scam

At the request of the Federal Trade Commission and the State of Florida, a federal court has temporarily halted a massive phony debt relief operation that bilked tens of millions of dollars from financially strapped consumers, including the elderly and disabled.

According to the FTC and Florida, Jeremy Lee Marcus, Craig Davis Smith and Yisbet Segrea, through 11 companies, got people to pay hundreds or thousands of dollars a month by falsely promising they would pay, settle, or obtain dismissals of consumers’ debts and improve their credit. Over time, victims found their debts unpaid, their accounts in default, and their credit scores severely damaged – some were sued by their creditors, and some were forced into bankruptcy.

The FTC and Florida allege that the defendants falsely claimed non-profit status to appear more credible and legitimate. The defendants then promised consumers guaranteed debt consolidation loans for tens of thousands of dollars with attractive interest rates and significantly lower monthly payments than consumers were paying their creditors. Once consumers agreed to the purported loan, the defendants almost immediately debited the consumers’ bank accounts for an initial loan “repayment” or a processing fee, and then kept debiting consumers’ bank accounts each month, in amounts ranging from $200 to $1,000 or more. The FTC and Florida charge that the defendants, despite taking these monthly payments, failed to extend consumers the promised debt consolidation loans.

The defendants also called people who were already enrolled with debt relief providers claiming they were taking over the servicing of those accounts and falsely claiming they would provide the same or similar services. Many of their victims had worked for years with their previous debt relief providers and had saved money in escrow accounts for use in negotiating with creditors. The defendants told these consumers to transfer their escrow money to defendants, and then debited up to $1,000 each month from the consumers’ bank accounts. Contrary to the defendants’ promises, people got little to nothing for their money and ended up in worse financial positions.

Marcus, Smith, Segrea and their companies are charged with violating the FTC Act, the FTC’s Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act.

The corporate defendants are Financial Freedom National Inc., formerly known as (f/k/a) Institute for Financial Freedom Inc. and Marine Career Institute Sea Frontiers Inc., also doing business as (d/b/a) 321 Loans, Instahelp America Inc., Helping America Group, United Financial Support, Breeze Financial Solutions, 321Financial Education, Credit Health Plan, Credit Specialists of America, American Advocacy Alliance and Associated Administrative Services; 321Loans Inc., f/k/a 321 Loans Inc., also d/b/a 321Financial Inc.; Instahelp America Inc, f/k/a Helping America Team Inc., also d/b/a Helping America Group; Helping America Group LLC, f/k/a Helping America Group Inc.; Breeze Financial Solutions Inc., also d/b/a Credit Health Plan and Credit Maximizing Program; US Legal Club LLC; Active Debt Solutions LLC, f/k/a Active Debt Solutions Inc., also d/b/a Guardian Legal Center; Guardian LG LLC, also d/b/a Guardian Legal Group; American Credit Security LLC, f/k/a American Credit Shield LLC; Paralegal Support Group LLC, f/k/a Paralegal Staff Support LLC; and Associated Administrative Services LLC, also d/b/a Jobfax.

Relief defendants that profited from the scheme are JLMJP Pompano LLC; 1609 Belmont Place LLC; 16 S H Street Lake Worth LLC; 17866 Lake Azure Way Boca LLC; 114 Southwest 2nd Street DBF LLC; 110 Glouchester St. LLC; 72 SE 6th Ave. LLC; Fast Pace 69 LLC; Strategic Acquisitions TWO LLC; Halfway International LLC, also d/b/a 16 H.S. Street 12Plex LLC, 311 SE 3rd St. LLC, 412 Bayfront Drive LLC, 110 Glouchester St. LLC, 72 SE 6th Ave. LLC, 114 SW 2nd Street JM LLC, 8209 Desmond Drive LLC, and HLFP LLC; Halfway NV LLC, also d/b/a Halfpay International LLC; and Nantucket Cove of Illinois LLC.

The FTC would like to thank its co-plaintiff, Florida’s Office of the Attorney General, as well as the following agencies: the Florida Department of Agriculture and Consumer Services, Iowa’s Office of the Attorney General, Ohio’s Office of the Attorney General, Minnesota’s Office of the Attorney General, the Better Business Bureau of Southeast Florida, and the Broward County Sherriff’s Office.

The Commission vote approving the complaint was 2-0. The U.S. District Court for the Southern District of Florida entered a temporary restraining order against the defendants on May 9, 2017, followed by a preliminary injunction on May 17, 2017.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook

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