Davit Gasparyan, a/k/a David Gasparyan

Agency: Consumer Financial Protection Bureau
Date: Apr. 21, 2016
Type: enforcement action
Source: consumerfinance.gov/enforcement/actions/davit-gasparyan-k-david-gaspar
Pages: 49
PDFs: 3 documents (links below)

Documents in this case

Complaint · 14 p.
Amended complaint · July 2016 · 18 p.
Stipulation · Sept. 2017 · 16 p.

Case summary

The Consumer Financial Protection

Bureau (CFPB) took action against Davit Gasparyan, a/k/a David Gasparyan,

co-founder of a company that resold loan applications containing sensitive

personal data to lenders and data brokers without assessing the sources of

those leads or the purchasers they sold to. In a complaint filed in federal

court on April 21, 2016, the CFPB alleged that Gasparyan co-founded and

operated T3Leads, a lead aggregator that bought and sold payday and installment

loan applications without properly vetting buyers and sellers. The CFPB filed

separate lawsuits against co-founder Dmitry Fomichev on April 21, 2016, and

T3Leads and two other individuals in December 2015.

Under the Dodd-Frank Act, the CFPB can take action against institutions or individuals engaged in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. An order entered by the court to resolve the claims against Gasparyan imposes injunctive relief and a $250,000 penalty.

Complaint

PDF of this document (14 pages)

Page 2

KARA K. MILLER, VA Bar #47821 Email: [email protected] Telephone: (202) 435-7825 LEANNE E. HARTMANN, CA Bar #264787 Email: [email protected] Telephone: (415) 844-9787 Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Facsimile: (202) 435-7329 Attorneys for Plaintiff

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION

Case No. 2:16-cv-2725

COMPLAINT FOR VIOLATIONS OF THE CONSUMER FINANCIAL PROTECTION ACT OF 2010

Plaintiff,

Davit Gasparyan, a/k/a David Gasparyan,

Defendant.

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 1 of 14 Page ID #:1

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lenders and other purchasers. T3 failed to vet or monitor its lead generators and lead purchasers, exposing consumers to the risk of having their information purchased by actors who would use it for illegal purposes. T3 allowed its lead generators to attract consumers with misleading statements and took unreasonable advantage of consumers’ lack of understanding of the material risks, costs, or conditions of the loan products for which they applied. T3’s conduct was unfair and abusive, in violation of the CFPA, 12 U.S.C. §§ 5531, 5536(a)(1). Gasparyan knowingly or recklessly provided substantial assistance to T3 in its unfair and abusive acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3). Jurisdiction and Venue 1.

This Court has subject-matter jurisdiction over this action because it is brought under “Federal consumer financial law,” 12 U.S.C. § 5565(a)(1), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.

This Court has personal jurisdiction over the Defendant because the causes of action arose from the Defendant’s conduct of business in this District, and the Defendant resides here. 12 U.S.C. § 5564(f). 3.

Venue is proper in this District because a substantial part of the acts or omissions giving rise to the claims occurred here, and the Defendant transacted Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 2 of 14 Page ID #:2

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business in this district and resides in this district. 28 U.S.C. § 1391(b), (c); 12 U.S.C. § 5564(f).

Parties 4.

The Bureau is an independent agency of the United States charged with regulating the offering and providing of consumer-financial products and services under “Federal consumer financial laws.” 12 U.S.C. § 5491(a). The Bureau is authorized to initiate civil actions in federal district court, by its own attorneys, to address violations of “Federal consumer financial law.” 12 U.S.C. § 5564(a)-(b).

Gasparyan is a co-founder of T3 and was the Chief Financial Officer from the company’s founding in 2005 until 2009 and the Chief Marketing Officer from the company’s founding through July 2014. Gasparyan had managerial responsibility for T3 and materially participated in the conduct of its affairs. Gasparyan resides in this District and, in connection with the matters alleged, transacted business here.

Factual Background 6.

D and D Marketing, Inc., d/b/a T3Leads, is a California S-Corporation with its principal place of business at 4000 West Alameda Avenue, Suite 200, Burbank, California, 91436. T3 is in the business of receiving consumer-loan Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 3 of 14 Page ID #:3

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applications from lead generators and selling the applications as leads to smalldollar lenders.

Gasparyan co-founded T3 in 2005 and claims to own 50% of the company.

Gasparyan served as Chief Financial Officer from the company’s founding in 2005 until 2009 and as Chief Marketing Officer from the company’s founding through July 2014.

Gasparyan had substantial control over and involvement in the establishment of T3’s business policies and practices. 10.

T3 has a network of lead generators from which it receives applications and a network of purchasers to which it sells those applications. T3 sometimes acted as its own lead generator, accepting applications directly from consumers.

11.

T3 does not share the identities of its lead generators with its purchasers, and T3 does not share the identities of its purchasers with its lead generators.

12.

Lead generators operate websites that advertise loans and through which consumers submit loan applications. Lead generators transfer the applications to T3, and T3 sells the applications to purchasers in its network. Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 4 of 14 Page ID #:4

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13.

The purchasers include online small-dollar lenders, as well as data managers, data brokers, and remarketing companies. 14.

Lenders to which T3 sells applications extend credit in the form of small-dollar loans for use by consumers for personal, family, or household purposes, with an expectation that the principal, interest, and fees will be collected from consumers.

15.

Data managers are intermediaries for lenders that outsource their leadpurchasing activities, and data brokers are lead aggregators that have their own networks of purchasers to which they sell applications after they purchase them from T3. T3 does not know the end purchasers of the applications it sells to data managers or data brokers. Remarketing companies buy consumer information to send marketing materials to consumers for products other than the loans for which consumers applied.

16.

To filter and sell applications to purchasers, T3 uses a “ping tree,” which sets the order in which purchasers have the opportunity to purchase a given application from T3. The position of each purchaser in the ping tree is determined primarily by the price the purchaser is willing to pay T3 for that application; the higher the price, the better the purchaser’s position in the ping tree. 17.

Gasparyan shared responsibility for deciding the position of each purchaser in the ping tree and designed T3’s systems to filter and sell applications Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 5 of 14 Page ID #:5

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in the manner most profitable to T3, without regard for the practices of lead generators or purchasers.

18.

A consumer who submits a loan application on a lead generator’s webpage is immediately redirected from that page to a lender’s webpage. This automated process takes just seconds, and the consumer is not informed that the loan application has been filtered through T3 or sold by T3. 19.

T3 does not continuously monitor lead generator websites to check for misleading or inaccurate statements to consumers. 20.

T3 regularly accepts applications from lead generators whose websites include misrepresentations that are likely to mislead consumers into believing that lenders to which they will be directed have been evaluated and meet certain standards, such as following rules and practices set by industry associations and government agencies or offering reasonable rates. 21.

T3 also accepts applications from lead generators who have incorrectly represented that they are themselves lenders and lead generators who have falsely suggested that they would help consumers find the best rates or lowest fees or that they would review consumers’ applications to match them with the most appropriate lenders.

22.

Despite the representations to consumers by some of them, T3’s lead generators typically do not provide loans directly to consumers, do not select the Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 6 of 14 Page ID #:6

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lenders that will see a consumer’s application, and have no involvement in determining or knowledge of the specific terms of the loan a consumer receives after T3 sells the application. Indeed, lead generators forward applications to T3 without regard for how the consumers’ information will be used. 23.

T3 does not require its purchasers to provide T3 with the precise loan terms that consumers will be offered, and T3 makes no attempt to match consumers with the best loan for their needs, as consumers are led to believe by some lead generators.

24.

T3 has reason to believe or knows that the applications it sells are likely to result in loans with interest rates that exceed state usury limits or otherwise fail to comply with laws of the state where the consumer is located. T3 knows in advance of its sales the application parameters each of its purchasers will accept, and T3 knows the identity of each purchaser. T3 sells to these purchasers based on its own financial interests, without regard to representations to and expectations of consumers.

25.

T3 does not require data managers or data brokers to disclose the ultimate purchasers of T3’s applications. T3 therefore does not know the identity of all lenders that obtain consumer applications through its lead-purchaser network. 26.

T3 does not vet or monitor the purchasers in its network for compliance with applicable laws.

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 7 of 14 Page ID #:7

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27.

Many of T3’s lenders are entities organized by Indian tribes, known as tribal lenders, or organized under the laws of foreign jurisdictions, known as offshore lenders. These lenders typically claim immunity from state regulation, do not comply with the laws of the states where the consumers to which they make loans are located, and do not concede that they are subject to jurisdiction in a forum convenient to the consumer. T3 fails to provide accurate information to consumers about the purchasers in T3’s network.

28.

Tribal lenders and offshore lenders typically charge higher interest rates than lenders adhering to state laws. Because they charge higher interest rates, these lenders generally are willing to pay more for applications and thus rank at the top of the T3 ping tree.

29.

Many of the tribal lenders among T3’s purchasers offer contracts providing for the application of tribal law to the contract and providing an exclusive tribal dispute-resolution process.

30.

Certain entities operating or purporting to operate in the small-dollarloan industry have engaged in a variety of fraudulent schemes involving applications purchased from lead aggregators. T3 knew or should have known of such fraudulent actors in the small-dollar-loan industry and the risk of illegal actors purchasing its applications.

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 8 of 14 Page ID #:8

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31.

In 2013, T3 requested information regarding whether its purchasers complied with the laws of the states where they made loans. Many of its purchasers failed to respond to this request, but T3 continued to do business with them. 32.

Purchasers provide regular feedback to T3 regarding the quality of the purchased applications, including the number of applications that result in loans and reasons why some did not result in loans. T3 uses this information to evaluate its lead generators and refine its processing to optimize “conversion,” or the rate at which applications result in loans. This optimization is conducted for T3’s benefit—to sell more applications.

33.

T3 controls the information shared between its lead generators and its purchasers, allowing lead generators to claim ignorance of the terms of the loans offered to consumers and allowing purchasers to claim ignorance of the methods used to attract consumers. T3’s process allows some purchasers to receive applications that they have been prohibited from soliciting directly. Count I Substantial Assistance in T3’s Unfair Acts and Practices

34.

Plaintiff realleges and incorporates by reference paragraphs 1-33 of this Complaint.

35.

The lenders to which T3 sells applications are “covered persons” under the CFPA—they extend credit for use by consumers for personal, family, or household purposes. 12 U.S.C. § 5481(15)(A)(i). Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 9 of 14 Page ID #:9

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36.

T3 provides a material service to covered persons in connection with the offering or provision by the covered persons of a consumer-financial product or service. T3 is a “service provider” to covered persons under the CFPA. 12 U.S.C. § 5481(26)(A).

37.

An act or practice is unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumers or to competition. 12 U.S.C. § 5531(c)(1).

38.

T3’s lead generators make statements to consumers regarding the lenders that will receive the consumers’ information and the loans those lenders will offer.

39.

T3 knows or should know of the lead generators’ statements and that they are often false and misleading.

40.

T3 does not vet or monitor its purchasers for illegal activity. 41.

T3 does not require data managers or data brokers to disclose the end purchasers of applications.

42.

Consumers are not notified that T3 is involved with processing their loan applications and cannot reasonably investigate or assess the reliability of the lenders to which their applications are ultimately sold. 43.

T3’s conduct is likely to cause substantial injury to consumers. Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 10 of 14 Page ID #:10

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44.

The potential benefit of obtaining a loan is not outweighed by the likelihood of injury from T3’s failure to vet and monitor its purchasers. 45.

T3’s conduct constitutes an unfair act or practice under 12 U.S.C. §§ 5531(c)(1), 5536(a)(1)(B).

46.

Gasparyan had significant responsibility for establishing T3’s policies and practices, and, throughout his employment at T3, he had substantial control over T3 operations.

47.

Gasparyan knowingly or recklessly provided substantial assistance to T3, a service provider engaged in unfair acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3).

Count II Substantial Assistance in T3’s Abusive Acts and Practices

48.

Plaintiff realleges and incorporates by reference paragraphs 1-33 of this Complaint.

49.

T3 provides a material service to covered persons in connection with the offering or provision by the covered persons of a consumer financial product or service. T3 is a “service provider” to covered persons under the CFPA. 12 U.S.C. § 5481(26)(A).

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 11 of 14 Page ID #:11

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51.

An act or practice is abusive if it “takes unreasonable advantage of . . . a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service.” 12 U.S.C. § 5531(d)(2)(A). 52.

Contrary to representations by lead generators, consumers are likely to be steered, through T3’s ping tree, to lenders offering less-favorable terms than may otherwise be available to them. In particular, consumers are likely to be steered to lenders that charge higher interest rates than lenders that comply with state laws, that do not adhere to state usury limits, or that claim immunity from state regulation and jurisdiction. Consumers also are likely to be steered to lenders that offer contracts providing for the application of tribal law to the contract and providing an exclusive tribal dispute-resolution process. 53.

The possibility of being matched by T3 with a lender that offers lessfavorable terms than may otherwise be available is not disclosed to consumers by lead generators or T3. Only after consumers are filtered through the T3 ping tree and redirected from a lead generator’s page to a lender’s e-signature page can consumers find the offered terms and links to lengthy disclosures where lenders reveal material terms such as their tribal affiliation and claimed immunity. 54.

The inaccurate statements by T3’s lead generators decrease the likelihood that consumers will read the lengthy disclosures on a lender’s webpage. Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 12 of 14 Page ID #:12

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55.

The cost of a loan relative to what other lenders might offer, the law governing a loan contract, including whether the lender complies with laws of the consumer’s state, and the available forum for raising disputes with the lender or in which the consumer might be sued by the lender are material risks, costs, or conditions.

56.

T3 knows or should know of lead generators’ representations to consumers. T3 knows or should know that its process results in many, if not most, applications being steered to lenders that make loans to consumers that do not comport with express or implied representations made on lead-generator websites. 57.

T3’s conduct takes advantage of consumers’ lack of understanding of the material risks, costs, or conditions of the products for which they apply and constitutes an abusive act or practice under 12 U.S.C. §§ 5531(d)(2)(A), 5536(a)(1)(B).

58.

Gasparyan had significant responsibility for establishing T3’s policies and practices, and, throughout his employment at T3, he had substantial control over T3’s operations.

59.

Gasparyan knowingly or recklessly provided substantial assistance to T3, a service provider engaged in unfair acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3).

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 13 of 14 Page ID #:13

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Prayer for Relief Wherefore, the Plaintiff requests that the Court: 1.

award injunctive relief as may be necessary to prevent consumer injury during the pendency of this action and to preserve the possibility of effective final relief;

permanently enjoin Defendant from committing future violations of the CFPA or any provision of “Federal consumer financial law,” as defined by 12 U.S.C. § 5481(14);

grant additional injunctive relief as may be just and proper; 4.

award damages or other monetary relief against Defendant; 5.

order Defendant to pay redress to harmed consumers; 6.

order disgorgement of ill-gotten revenues from Defendant; 7.

impose civil money penalties against Defendant; 8.

order Defendant to pay Plaintiff’s costs and fees incurred in connection with prosecuting this action; and 9.

award additional relief as the Court may determine to be just and proper.

Dated: April 21, 2016

Respectfully submitted,

/s/ Leanne E. Hartmann Leanne E. Hartmann (CA Bar #264787)

Case 2:16-cv-02725 Document 1 Filed 04/21/16 Page 14 of 14 Page ID #:14

Amended complaint (July 2016)

PDF of this document (18 pages)

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KARA K. MILLER (pro hac vice) Email: [email protected] MEGHAN SHERMAN CATER (pro hac vice) Email: [email protected] BARRY REIFERSON (pro hac vice) Email: [email protected] LEANNE E. HARTMANN, CA Bar #264787 Email: [email protected] Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Telephone: (202) 435-7825 Facsimile: (202) 435-7329 KENT A. KAWAKAMI, CA Bar #149803 Email: [email protected] Local Counsel United States Attorney’s Office Central District of California – Civil Division 300 North Los Angeles Street, Room 7516 Los Angeles, CA 90012 Telephone: (213) 894-4858 Facsimile: (213) 894-2380 Attorneys for Plaintiff Consumer Financial Protection Bureau

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION

Case No. 2:16-cv-2725-PSG(Ex)

AMENDED COMPLAINT FOR VIOLATIONS OF THE CONSUMER FINANCIAL PROTECTION ACT OF

Consumer Financial Protection Bureau,

Plaintiff,

Davit Gasparyan, a/k/a David Gasparyan,

Defendant.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 1 of 18 Page ID #:131

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Introduction The Consumer Financial Protection Bureau (Bureau) brings this action against Davit Gasparyan, a/k/a David Gasparyan, (Defendant or Gasparyan) under the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5536(a)(3), 5564, 5565. Gasparyan co-founded D and D Marketing, Inc., d/b/a T3Leads (T3), a lead aggregator that sells consumer-loan applications as “leads” to small-dollar lenders and other purchasers. T3 failed to vet or monitor its lead generators and lead purchasers, exposing consumers to the risk of having their information purchased by actors who would use it for illegal purposes. T3 allowed its lead generators to attract consumers with misleading statements, and T3 took unreasonable advantage of consumers’ lack of understanding of the material risks, costs, or conditions of the loan products for which they apply. T3’s conduct was unfair and abusive, in violation of the CFPA, 12 U.S.C. §§ 5531, 5536(a)(1). Gasparyan knowingly or recklessly provided substantial assistance to T3 in its unfair and abusive acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3).

Jurisdiction and Venue 1.

This Court has subject-matter jurisdiction over this action because it is brought under “Federal consumer financial law,” 12 U.S.C. § 5565(a)(1), presents Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 2 of 18 Page ID #:132

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a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.

Venue is proper in this District because a substantial part of the acts or omissions giving rise to the claims occurred here, and the Defendant transacted business in this district and resides in this district. 28 U.S.C. § 1391(b), (c); 12 U.S.C. § 5564(f).

Parties 4.

Gasparyan is a co-founder and was the Chief Financial Officer from the company’s founding in 2005 until 2009 and the Chief Marketing Officer from the company’s founding through July 2014. Gasparyan had managerial responsibility for T3 and materially participated in the conduct of its affairs. Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 3 of 18 Page ID #:133

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Gasparyan resides in this District and, in connection with the matters alleged, transacted business here.

Factual Background 6.

D and D Marketing, Inc., d/b/a T3Leads, is a California S-Corporation with its principal place of business at 4000 West Alameda Avenue, Suite 200, Burbank, California, 91436. T3 is in the business of receiving consumer-loan applications from lead generators and selling the applications as leads to smalldollar lenders.

Gasparyan co-founded T3 in 2005 and claims to own 50% of the company.

Gasparyan served as Chief Financial Officer from the company’s founding in 2005 until 2009 and as Chief Marketing Officer from the company’s founding through July 2014.

Gasparyan had substantial control over and involvement in the establishment of T3’s business policies and practices. 10.

Lead generators operate websites that advertise loans and through which consumers submit loan applications. Lead generators transfer the applications to T3.

11.

T3 hosts and controls certain lead-generator websites from which it receives loan applications, acting as its own lead generator in these instances. Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 4 of 18 Page ID #:134

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12.

T3 sells the loan applications it receives from lead generators and its own websites to purchasers in its network.

13.

The purchasers in T3’s network include online small-dollar lenders, as well as data managers, data brokers, and remarketing companies. 14.

Lenders to which T3 sells loan applications extend credit in the form of small-dollar loans for use by consumers for personal, family, or household purposes, with an expectation that the principal, interest, and fees will be collected from consumers.

15.

Data managers are intermediaries for lenders that outsource their leadpurchasing activities, and data brokers are lead aggregators that have their own networks of purchasers to which they sell loan applications after they purchase them from T3. T3 does not require that data managers and data brokers disclose the end purchasers of applications.

16.

Remarketing companies buy consumer information to market products other than the loans for which consumers applied. T3 does not require its purchasers to provide information to T3 or to consumers about remarketing relationships they may have.

17.

From the founding of T3 through at least July 2014, Gasparyan had authority and responsibility to decide whether to accept any lead generator or purchaser into or remove them from T3’s network. Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 5 of 18 Page ID #:135

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18.

From the founding of T3 through at least July 2014, Gasparyan shared responsibility for deciding the position of each purchaser in the ping tree and designing T3’s systems to filter and sell applications in the manner most profitable to T3, without regard for the practices of lead generators or purchasers. 20.

T3 knows or has reason to believe that its lead generators’ websites contain misleading or inaccurate statements. Nevertheless, T3 does not effectively monitor lead generators’ websites to check for misleading or inaccurate statements. 22.

In addition to the websites of its lead generators, the lead-generating websites owned and operated by T3 have contained misleading or inaccurate statements.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 6 of 18 Page ID #:136

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23.

T3 regularly receives applications from its own websites or the websites of its lead generators that contain misleading or inaccurate statements that are likely to mislead consumers into believing that lenders to which they will be directed have been evaluated and meet certain standards. For example, leadgenerating websites include statements such as, “[t]he owners of this site and our lenders comply with all state and federal regulations to short-term loans,” or “Federal law (Lending Reform Act) protects you against usurious interests. We provide you with lenders who follow the rules. Their rates are reasonable.” 24.

T3 regularly accepts applications from its own websites or the websites of its lead generators that contain misleading or inaccurate statements that are likely to mislead consumers into believing that their application is being submitted directly to a lender by, for example, using a name that appears to be a lender, such as “BrightonLenders.com,” or language suggesting the website is that of a lender, such as “Cash Now is the premier provider of online payday loans to US residents,” or “www.800fastpayday.com supplies payday loans to borrowers so they can conveniently access the cash they need without the hassle and stress imposed by other lenders.”

25.

T3 regularly accepts applications from its own websites or the websites of its lead generators that contain misleading or inaccurate statements that have falsely suggested that the lead generator would help consumers find the best Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 7 of 18 Page ID #:137

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rates or lowest fees or that it would review consumers’ applications to match them with the most appropriate lenders. For example, lead-generating websites include statements such as, “you can be sure that you are getting the best rates available;” “we work to find you the best possible loan terms;” or “[o]ur system accounts for every aspect of your stated need and personal details when seeking the right fit. This helps you get the amount you need with the best possible APR and repayment terms.”

26.

Lead generators forward applications to T3 without regard for how the consumers’ information will be used.

27.

T3 does not require its purchasers to provide T3 with the precise loan terms that each consumer will be offered, and T3 makes no attempt to match consumers with the best loan for their needs, as consumers are led to believe by some of T3’s or its lead generators’ websites. T3 sells to purchasers based on its own financial interests, without regard for representations that have been made to and expectations of consumers.

28.

T3 knows in advance of its sales the application parameters each of its purchasers will accept, and T3 knows the identity of each purchaser in its network. T3 does not vet or monitor the purchasers in its network for compliance with applicable laws.

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29.

T3 knows or has reason to believe that the applications it sells are likely to result in loans with interest rates that exceed state usury limits or otherwise fail to comply with laws of the state where the consumer is located. 30.

T3 knows the consumer’s state of residence for each application it sells, and T3 knows or should know that some of the applications it sells are from consumers located in states where the resulting loan will be void or the lender will have no legal right to collect the principal, interest, or fees from the consumer. 31.

T3 receives applications from consumers in all U.S. states and sells applications from consumers in any state for which a purchaser requests them. T3 does not require proof that the lenders that receive its applications are permitted to make loans to consumers in each state from which they seek applications. 32.

T3 does not require data managers or data brokers to disclose the ultimate purchasers of T3’s applications. T3 therefore does not know the identity of all lenders that purchase consumer applications through its lead-purchaser network.

33.

Many of the lenders that purchase applications through T3 are entities organized by Native American Indian tribes, known as tribal lenders, or under the laws of foreign jurisdictions, known as offshore lenders. T3 knows or should know that many of its purchasers are tribal or offshore lenders, and T3 sells applications Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 9 of 18 Page ID #:139

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to those lenders knowing that consumers are not informed that their application may be directed to one of them.

34.

Tribal and offshore lenders typically claim immunity from state regulation, do not comply with the laws of the states where the consumers to which they make loans are located, and do not concede that they are subject to jurisdiction in a forum convenient to the consumer. 35.

Tribal and offshore lenders typically charge higher interest rates than do lenders adhering to state laws. These lenders rely on lead generators to find customers. They are willing to pay competitive prices for applications and regularly rank at the top of the T3 ping tree. 36.

Many of the tribal lenders among T3’s purchasers offer contracts providing for the application of tribal law to the contract and providing an exclusive tribal dispute-resolution process.

37.

T3 has sold hundreds of thousands of loan applications to tribal or offshore lenders.

38.

T3 knew or should have known that certain entities operating or purporting to operate in the small-dollar-loan industry have engaged in a variety of scams or fraudulent schemes involving applications purchased from lead aggregators, such as contacting consumers to collect non-existent debt. T3 encountered so much illicit activity that one employee referred to “the notorious Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 10 of 18 Page ID #:140

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scams we deal with on a daily basis” in an internal e-mail message. T3 knew or should have known of the risk of purchasers using its applications for illegal purposes.

39.

In 2013, T3 developed a “Lender Audit Questionnaire” and requested information regarding whether its purchasers complied with the laws of the states where they made loans. Many of its purchasers failed to respond to this request or admitted a failure to comply with state laws, but T3 continued to do business with them. T3’s Lender Audit Questionnaire asked purchasers to identify ongoing investigations of their activities, but it did not request information about existing orders that may restrict the lending activity of purchasers. 40.

Purchasers provide regular feedback to T3 regarding the quality of the purchased applications, including the number of applications that result in loans and reasons why applications did not result in loans. T3 uses this information to evaluate its lead generators and refine its processing to optimize the rate at which applications result in loans. This optimization is conducted for T3’s benefit—to sell more applications.

41.

T3 does not share the identities of its lead generators with its purchasers, and T3 does not share the identities of its purchasers with its lead generators.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 11 of 18 Page ID #:141

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42.

T3 controls the information flow between its lead generators and its purchasers, allowing lead generators to claim ignorance of the terms of the loans offered to consumers and allowing purchasers to claim ignorance of the methods used to attract consumers.

43.

T3’s process allows lenders to receive applications from consumers to whom they have been prohibited from lending, and consumers have no way to know of the risk of being directed through T3 to such a lender. For example, from 2010 to 2013, Northway Financial Corporation, Ltd. was the subject of cease-anddesist orders by regulators in at least six states, and consumers from only one of those states were excluded from the applications that might be accepted from T3 by Blizzard Interactive, the purchaser acting on behalf of Northway. Similarly, on January 16, 2013, the Department of Corporations of the State of California found Joro Resources LTD, doing business as IdealGelt, to have violated the California Financial Code and ordered it to desist and refrain from originating or offering to originate deferred-deposit transactions in the state of California without first obtaining a license or otherwise being exempt; as of July 2013, T3 continued to direct applications from California consumers to Joro Resources LTD, doing business as IdealGelt, at www.IdealGelt.com.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 12 of 18 Page ID #:142

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Count I Substantial Assistance in T3’s Unfair Acts and Practices

44.

Plaintiff realleges and incorporates by reference paragraphs 1-43 of this Complaint.

45.

47.

48.

T3 and its lead generators make statements to consumers regarding the lenders that will receive the consumers’ information and the loans those lenders will offer.

49.

T3 knows or should know of the lead generators’ statements and that they are often false and misleading.

50.

T3 does not vet or monitor its purchasers for illegal activity. Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 13 of 18 Page ID #:143

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51.

T3 does not require data managers or data brokers to disclose the end purchasers of applications.

52.

T3’s conduct is likely to cause substantial injury to consumers. 54.

The potential benefit of obtaining a loan is not outweighed by the likelihood of injury from T3’s failure to vet and monitor its purchasers. 55.

T3’s conduct constitutes an unfair act or practice under 12 U.S.C. §§ 5531(c)(1), 5536(a)(1)(B).

56.

Gasparyan had significant responsibility for establishing T3’s policies and practices, and, throughout his employment at T3, he had substantial control over T3 operations.

57.

Gasparyan knowingly or recklessly provided substantial assistance to T3, a service provider engaged in unfair acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3).

Count II Substantial Assistance in T3’s Abusive Acts and Practices

58.

Plaintiff realleges and incorporates by reference paragraphs 1-43 of this Complaint.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 14 of 18 Page ID #:144

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59.

The lenders to which T3 sells applications are “covered persons” under the CFPA—they extend credit for use by consumers for personal, family, or household purposes. 12 U.S.C. § 5481(15)(A)(i).

60.

61.

Contrary to representations by T3 and its lead generators, consumers are likely to be steered, through T3’s ping tree, to lenders offering less-favorable terms than may otherwise be available to them. In particular, consumers are likely to be steered to lenders that charge higher interest rates than lenders that comply with state laws, that do not adhere to state usury limits, or that claim immunity from state regulation and jurisdiction. Consumers also are likely to be steered to lenders that offer contracts providing for the application of tribal law to the contract and providing an exclusive tribal or foreign dispute-resolution process. 63.

The possibility of being matched by T3 with a lender that offers lessfavorable terms than may otherwise be available is not disclosed to consumers by Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 15 of 18 Page ID #:145

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lead generators or T3. Only after consumers are filtered through the T3 ping tree and redirected from a lead generator’s page to a lender’s e-signature page can consumers find the offered terms and links to lengthy disclosures where lenders reveal material terms such as their tribal affiliation, claimed immunity, and mandatory dispute-resolution policies.

64.

The inaccurate statements by T3 and its lead generators decrease the likelihood that consumers will read the lengthy disclosures on a lender’s webpage. 65.

66.

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 16 of 18 Page ID #:146

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68.

Gasparyan had significant responsibility for establishing T3’s policies and practices, and, throughout his employment at T3, he had substantial control over T3’s operations.

69.

Gasparyan knowingly or recklessly provided substantial assistance to T3, a service provider engaged in unfair acts and practices, in violation of the CFPA, 12 U.S.C. § 5536(a)(3).

Prayer for Relief Wherefore, the Plaintiff requests that the Court: 1.

award injunctive relief as may be necessary to prevent consumer injury during the pendency of this action and to preserve the possibility of effective final relief;

permanently enjoin Defendant from committing future violations of the CFPA or any provision of “Federal consumer financial law,” as defined by 12 U.S.C. § 5481(14);

grant additional injunctive relief as may be just and proper; 4.

award damages or other monetary relief against Defendant; 5.

order Defendant to pay redress to harmed consumers; 6.

order disgorgement of ill-gotten revenues from Defendant; 7.

impose civil money penalties against Defendant; Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 17 of 18 Page ID #:147

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order Defendant to pay Plaintiff’s costs and fees incurred in connection with prosecuting this action; and 9.

award additional relief as the Court may determine to be just and proper.

Dated: July 6, 2016

Respectfully submitted,

/s/ Kara K. Miller Kara K. Miller (VA Bar #47821, admitted pro hac vice)

Case 2:16-cv-02725-PSG-E Document 30 Filed 07/08/16 Page 18 of 18 Page ID #:148

Stipulation (Sept. 2017)

PDF of this document (16 pages)

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION

Case No. 2: 16-cv-2725

[Proposed] Stipulated Final Judgment and Order The Consumer Financial Protection Bureau (Bureau) filed this civil action on April 21, 2016, to obtain injunctive relief, restitution, civil money penalties, and other equitable relief against Davit Gasparyan, a/k/a David Gasparyan (Defendant) (together, the Parties). The First Amended Complaint (Complaint) alleges violations of §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5536(a)(3), 5564, 5565, in connection with Defendant’s alleged substantial assistance to D and D Marketing, Inc., d/b/a T3Leads (T3), which receives and has received consumer information (called “Leads”) from Lead Generators that market payday and installment loans and conveys and has conveyed those Leads to lenders and other Lead recipients. Consumer Financial Protection Bureau,

Plaintiff,

Davit Gasparyan a/k/a David Gasparyan,

Defendant.

E-FILED 9/8/17 -PSG Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 1 of 16 Page ID #:684

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The Parties agree to the entry of this Stipulated Final Judgment and Order (Order).

THEREFORE, it is ORDERED:

Findings and Conclusions 1.

This Court has jurisdiction over the Parties and the subject matter of this action.

The Parties agree to entry of this Order, without further adjudication of any issue of fact or law, to settle and resolve all matters in dispute arising from the conduct alleged in the Complaint to the date of this Order. 3.

Defendant neither admits nor denies any allegations in the Complaint, except as specifically stated in this Order. For purposes of this Order, Defendant admits the facts necessary to establish the Court’s jurisdiction over Defendant and the subject matter of this action.

Defendant waives any claim he may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order.

Each Party will bear its own costs and expenses, including, without limitation, attorneys’ fees.

The Parties agree that: (a) this Order contains the complete agreement between the Parties; (b) no promises, representations, or warranties other than what Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 2 of 16 Page ID #:685

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is contained in this Order have been made by the Parties; and (c) this Order supersedes any prior oral or written communications, discussions, or understandings.

Entry of this Order is in the public interest. Definitions 8.

“Defendant” means Davit Gasparyan, a/k/a David Gasparyan. 9.

“Effective Date” means the date this Order is entered. 10.

“Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegate. 11.

“Lead” is a consumer’s personal information received, transmitted, or otherwise used in connection with a consumer financial product or service. 12.

“Lead Aggregators” are Persons that obtain Leads and convey that information to other Persons. ”Lead Aggregation” is the practice of acting as a Lead Aggregator.

13.

“Lead Generators” are Persons that obtain Leads and transmit the Leads to Lead Aggregators or to other Persons. Lead Generation is the practice of acting as a Lead Generator.

14.

“Person” means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.

Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 3 of 16 Page ID #:686

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15.

“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Defendant based on substantially the same facts as described in the Complaint.

Relief Ordered A.

Conduct Relief 16.

In connection with Lead Generation or Lead Aggregation, Defendant, either directly or through his agents, servants, or employees, or through any entity in which he has or obtains a financial interest, including joint ventures, is permanently enjoined from:

knowingly or recklessly receiving Leads from Lead Generators whose consumer-facing content includes misleading, inaccurate, or false statements;

generating Leads through any means that involve misleading, inaccurate, or false statements; and c.

transmitting Leads that are not vetted in compliance with this Order.

17.

In connection with Lead Generation and Lead Aggregation, Defendant, either directly or through his agents, servants, or employees, and all Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 4 of 16 Page ID #:687

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entities in which he has or obtains a financial interest, including joint ventures, must:

undertake reasonable efforts to ensure that Leads conveyed to recipients do not result in consumer loans that are void in whole or in part under the laws of the consumer’s state of residence provided in the consumer’s loan documents based on statelicensing requirements or interest-rate limits; b.

obtain and preserve information about any end user of its Leads sufficient to ensure compliance with this paragraph (No. 17), including but not limited to copies of all licenses required by each state in which the recipient does business where the absence of such a license would render a loan void in whole or in part under the laws of that state;

create and implement a process for reviewing loans resulting from Leads conveyed by Defendant to reasonably ensure compliance with this paragraph (No. 17) and with federal and state privacy laws;

establish a policy that prohibits lenders to which it conveys Leads, directly or indirectly, from making consumer loans that are void in whole or in part under the laws of the consumer’s Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 5 of 16 Page ID #:688

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state of residence provided in the consumer’s loan documents based on state-licensing requirements or interest-rate limits; e.

refrain from conveying Leads where Defendant knows or reasonably believes that the Leads are likely to result in consumer loans that are void in whole or in part under the laws of the consumer’s state of residence provided in the consumer’s loan documents based on state-licensing requirements or interest-rate limits;

reasonably review consumer-facing content of all Lead Generators from which Defendant accepts Leads to reasonably ensure that it does not contain misleading, inaccurate, or false statements; and g.

require all Lead Generators from which Defendant accepts Leads to prominently disclose to consumers an accurate description of how Defendant will receive, convey, and process Leads.

For purposes of this paragraph (No. 17) and its subparts, no Person may take into consideration any contention that state or federal law is inapplicable, or that lenders are not subject to state or federal law, because of lender sovereignty or a Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 6 of 16 Page ID #:689

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lender’s foreign, off-shore, or tribal status or affiliation, or because of choice of foreign or tribal law.

Civil Money Penalty 18.

Under §1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Defendant must pay a civil money penalty in the amount of $250,000 to the Bureau.

19.

Within 10 days of the Effective Date, Defendant must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions. 20.

The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by §1017(d) of the CFPA, 12 U.S.C. § 5497(d).

21.

Defendant must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Defendant may not: a.

claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 7 of 16 Page ID #:690

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seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order.

22.

To preserve the deterrent effect of the civil money penalty, in any Related Consumer Action, Defendant may not argue that it is entitled to, nor may Defendant benefit from, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund (Penalty Offset). If the court in any Related Consumer Action grants a Penalty Offset, Defendant must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.

Default or Delinquency 23.

In the event of any default on Defendant’s obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amount not paid from the date of default to the date of payment, and will immediately become due and payable. Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 8 of 16 Page ID #:691

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24.

Under 31 U.S.C. § 7701, Defendant, unless he has already done so, must furnish to the Bureau his taxpayer-identifying number, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.

Reporting Requirements 25.

For 5 years from the Effective Date, Defendant must notify the Bureau of any development that may affect compliance obligations arising under this Order, including Defendant’s ownership of, direct or indirect control of, or employment with an entity involved in Lead Generation or Lead Aggregation related to consumer loans where the APR exceeds 36% (excluding (a) loans extended solely to finance the purchase of a vehicle or other consumer good in which the good secures the loan; (b) home mortgages and other loans secured by real property or a dwelling if recorded or perfected; (c) credit cards; (d) student loans; (e) non-recourse pawn loans; and (f) overdraft services and lines of credit), or that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendant; or a change in Defendant’s name or address. Defendant must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development.

26.

Within 7 days of the Effective Date, Defendant must: Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 9 of 16 Page ID #:692

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designate and provide to the Bureau at least one telephone number and an email, physical, and postal address as points of contact that the Bureau may use to communicate with Defendant;

identify in writing to the Bureau by name, telephone number, and physical, postal, email, and Internet addresses, all businesses of which Defendant is the majority owner or that Defendant directly or indirectly controls that engage in Lead Generation or Lead Aggregation relating to consumer lending; c.

describe in writing to the Bureau the activities of each business identified in response to paragraph 26.b, including the products and services offered and the means of advertising, marketing, and selling; and d.

Defendant must report any change in the information required to be submitted under paragraph 25 at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner.

27.

Within 30 days of the Effective Date, Defendant must: a.

identify Defendant’s telephone numbers and all email, Internet, physical, and postal addresses, including all residences; Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 10 of 16 Page ID #:693

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describe in detail Defendant’s involvement in every business for which he performs services in any capacity or that he wholly or partially owns, including Defendant’s title, role, responsibilities, participation, authority, control, and ownership. 28.

Within 120 days of the Effective Date, and again one year after the Effective Date, Defendant must submit to the Enforcement Director an accurate written compliance-progress report (Compliance Report), that, at a minimum: a.

describes in detail Defendant’s compliance with this Order; and b.

attaches a copy of each Order Acknowledgment obtained under Section E of this Order, unless previously submitted to the Bureau.

29.

After the one-year period, and for 4 years thereafter, Defendant must submit to the Enforcement Director additional Compliance Reports within 14 days of receiving a written request from the Bureau. 30.

Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Defendant must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Defendant paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 11 of 16 Page ID #:694

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31.

Should Defendant seek to transfer or assign all or part of his ownership of any business of which he is the majority owner or that he directly or indirectly controls that engages in Lead Generation or Lead Aggregation relating to consumer lending, Defendant must, as a condition of transfer or assignment, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Order.

Order Distribution and Acknowledgement 32.

Within 7 days of the Effective Date, Defendant must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury.

33.

Within 30 days of the Effective Date, Defendant, for any businesses of which he is the majority owner or that he directly or indirectly controls that engage in Lead Generation or Lead Aggregation relating to consumer lending, must deliver a copy of this Order to any Persons with responsibilities related to the injunctive relief described in this Order.

34.

For 5 years from the Effective Date, Defendant, for any business of which he is the majority owner or that he directly or indirectly controls that engage in Lead Generation or Lead Aggregation relating to consumer lending, must deliver a copy of this Order to any business entity resulting from any change in structure referred to in Section D, any future board members and executive Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 12 of 16 Page ID #:695

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officers, as well as to any Persons who will have responsibilities related to the injunctive relief described in this Order before they assume their responsibilities. 35.

Defendant must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery of the Order, from all Persons receiving a copy of this Order under this Section.

Recordkeeping 36.

Defendant must create and retain or, if already created, must retain, for at least 5 years from the Effective Date, for any business of which Defendant is the majority owner or that he directly or indirectly controls that engages in Lead Generation or Lead Aggregation relating to consumer lending, all documents, records, and data necessary to demonstrate full compliance with each provision of this Order.

37.

Defendant must make the documents identified in paragraph 36 available to the Bureau upon the Bureau’s request.

Notices 38.

Unless otherwise directed in writing by the Bureau, Defendant must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “Consumer Financial Protection Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 13 of 16 Page ID #:696

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Bureau v. Davit Gasparyan, a/k/a David Gasparyan, File No. 2013-0574-02” and send them either:

by overnight courier (not the U.S. Postal Service) to: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.

Washington D.C. 20006; or

by first-class mail to the below address and contemporaneously by email to [email protected]: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.

Washington D.C. 20552

Cooperation with the Bureau 39.

Defendant must cooperate fully with the Bureau in this matter, including in those cases consolidated with this matter for pretrial purposes, and in any investigation related to or associated with the conduct described in the Complaint. Defendant must provide truthful and complete information, evidence, and testimony. Defendant must appear for interviews, discovery, hearings, trials, and any other proceedings that the Bureau may reasonably request upon 10 days written notice, or other reasonable notice, at such places and times as the Bureau may designate, without the service of compulsory process. Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 14 of 16 Page ID #:697

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Compliance Monitoring 40.

For purposes of compliance monitoring, the Bureau may communicate directly with Defendant, unless Defendant retains counsel related to these communications.

41.

Defendant must permit Bureau representatives to interview any employee or other Person affiliated with Defendant who has agreed to such an interview. The Person interviewed may have counsel present. 42.

Nothing in this Order limits the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process. J.

Release 43.

The Bureau releases and discharges Defendant from all potential liability for law violations that the Bureau has or might have asserted based on the practices alleged in the Complaint, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices alleged in the Complaint in future enforcement actions against Defendant or his affiliates, including, without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau to determine and ensure compliance with the Order, or to seek penalties for any violations of the Order.

Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 15 of 16 Page ID #:698

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K. Retention of Jurisdiction 44.

The Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. It is SO ORDERED.

DATED this ___ day of ______________, 2017.

_________________________________

United States District Judge

8th September Case 2:16-cv-02725-PSG-E Document 78 Filed 09/08/17 Page 16 of 16 Page ID #:699