A Sevastopol man who orchestrated a scheme that defrauded tens of millions of student loan borrowers has been sentenced to 42 months in federal prison, the US attorney’s office in San Francisco said on Monday.

U.S. District Judge Susan Illston also ordered 43-year-old Brandon Frere on Friday to serve an additional 36 months of supervised release. The judge has set a hearing for Oct. 16 to determine how much restitution Frere will have to pay to his former clients, the student loan borrowers.

In December, Brother pleaded guilty to electronic fraud and money laundering costs in connection with the scheme.

In his plea deal, Frere admitted to defrauding borrowers of $ 25 million to $ 65 million between January 2014 and November 2018, according to the U.S. Attorney’s Office.

Frere owned and operated three Rohnert Park-based financial services companies – American Financial Benefits Center, the Financial Education Benefits Center, and Ameritech Financial – which sold “document preparation services” to those applying for federal student loan remission, a loan consolidation or reduced payment. programs.

Frere admitted to instructing his employees to use deceptive sales tactics to trick customers into buying additional financial service plans without their knowledge and to mislead borrowers about companies’ ability to reduce student loan repayments. , according to prosecutors.

His criminal defense attorney, Ed Swanson, could not be reached for comment on Monday.

During the initial enrollment of clients for the document preparation service, employees also enrolled them in a “financial education benefits program,” which purported to allow clients to enroll in services such as LifeLock identity theft protection and roadside assistance.

Employees then hid the program fees from customers to make it look like the cost was included in the main document preparation service. Frere told employees not to present the program as an optional service so that customers unknowingly buy it.

In addition, Frere asked employees to mislead borrowers about companies’ ability to make fixed monthly payments for student loans for the duration of loans and loan forgiveness under repayment plans. Employees unduly inflated the size of clients’ families, leaving clients with the impression that their monthly payments would be lower than they actually were.

To hide the money from its 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 Federal Trade Commission and he was concerned that the commission or a court never seize the money for his scheme, prosecutors said. . The FTC then filed a civil lawsuit against Frere and his companies in federal court in Oakland in February 2018.

Frere was arrested by federal agents on December 5, 2018, at San Francisco International Airport while he was attempt to board a flight in Cancun, Mexico, and was formally charged on October 1, 2019 with crimes related to the student loan program.

You can reach Editor-in-Chief Ethan Varian at [email protected] or 707-521-5412. On Twitter @ethanvarian


Source link

About The Author

Related Posts