FDATR, Inc.; Dean Tucci; and Kenneth Wayne Halverson
Documents in this case
Case summary
On November 20, 2020, the Bureau filed a lawsuit against FDATR, Inc. (FDATR), and its owners, Dean Tucci and Kenneth Wayne Halverson. FDATR was a corporation headquartered in Wood Dale, Illinois, that promised to provide student-loan debt-relief and credit-repair services to consumers nationwide. FDATR involuntarily dissolved in September 2020. Tucci and Halverson both owned and managed FDATR. The Bureau alleges that FDATR, Tucci, and Halverson violated the Telemarketing Sales Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and the Consumer Financial Protection Act of 2010 (CFPA) by engaging in deceptive acts or practices.
On February 25, 2021, the Bureau filed a notice of voluntary dismissal of Halverson, now deceased, and the court dismissed him from this action the next day. On February 7, 2022, the Bureau obtained a default judgment and order against FDATR imposing $2,117,133.28 in consumer redress, a $41,123,897 civil money penalty, and injunctive relief permanently banning it from offering or providing financial advisory, debt-relief, or credit-repair services and from telemarketing consumer financial products or services.
On January 10, 2025, the court granted summary judgment against Tucci, finding him liable for FDATR’s violations of the TSR and CFPA. After additional briefing, the court, on May 1, 2025, found that restitution and a civil money penalty in the same amounts awarded against FDATR were warranted against Tucci, and on May 9, 2025, the court entered a final judgment and order against Tucci making him jointly and severally liable for $2,117,133.28 in consumer redress, imposing a $41,123,897 civil money penalty, and banning him from offering or providing financial-advisory, debt-relief, or credit-repair services for 10 years. On July 18, 2025, the court denied Tucci’s motion to vacate the default judgment against FDATR and the final judgment against Tucci. On September 10, 2025, Tucci filed a notice of appeal, which remains pending.
Order
PDF of this document (14 pages)
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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION BUREAU OF CONSUMER FINANCIAL PROTECTION, Plaintiff, v.
FDATR, INC. et al., Defendants.
) ) ) ) ) ) ) ) )
No. 20 CV 6879 Judge John J. Tharp, Jr.
Magistrate Judge M. David Weisman DEFAULT JUDGMENT AND ORDER AGAINST FDATR, INC.
The Bureau of Consumer Financial Protection (Bureau) commenced this civil action on November 20, 2020, to obtain an injunction, monetary relief, and civil penalties from Defendant FDATR, Inc. and its principals. The complaint alleges violations of (1) the Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act), 15 U.S.C. §§ 6101–08, as was well as its implementing rule, the Telemarketing Sales Rule (TSR), 16 C.F.R. pt. 310, and (2) the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1). Upon consideration of the complaint, the Bureau’s motion for entry of default judgment against Defendant FDATR, Inc., and its supporting memorandum and exhibits, and the record in this matter, IT IS HEREBY ORDERED that the Bureau’s motion for entry of default judgment is GRANTED and, under Federal Rule of Civil Procedure 55(b)(2), DEFAULT JUDGMENT shall be ENTERED AGAINST DEFENDANT FDATR, INC.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:
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FINDINGS 1.
This Court has subject-matter jurisdiction over this action because it is brought under “[f]ederal 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. 2.
This Court has jurisdiction over FDATR, and venue is proper in this district because FDATR is or was located in, resides or resided in, or does or did business in this district. 12 U.S.C. § 5564(f), 28 U.S.C. § 1391(b).
3.
FDATR was properly served with a summons and the complaint. 4.
FDATR failed to answer or otherwise defend this action. 5.
The Clerk of the Court properly entered default against FDATR on October 6, 2021. (ECF No. 39.) 6.
The complaint states claims upon which relief may be granted under the CFPA, 12 U.S.C. §§ 5531, 5536(a), and the TSR, 16 C.F.R. pt. 310, which implements the Telemarketing Act, 15 U.S.C §§ 6101–08.
7.
The relief provided in this Order is appropriate and available under section 1055 of the CFPA, 12 U.S.C. § 5565, and the Telemarketing Act, 15 U.S.C. § 6102(c). 8.
Because of its default, FDATR is deemed to have admitted the well-pleaded facts of the complaint, and the allegations are taken as true. Fed. R. Civ. P. 8(b)(6). 9.
Because of FDATR’s default and the Clerk of the Court’s entry of default against FDATR, the Court may now exercise it discretion to enter a default judgment against FDATR. Fed. R. Civ. P. 55(b)(2).
10.
FDATR is a “covered person” under the CFPA, 12 U.S.C. § 5481(6), and also a “seller” or “telemarketer” engaged in “telemarketing” and the provision of “debt relief service[s]” Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 2 of 14 PageID #:401
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under the TSR, 16 C.F.R. § 310.2(o), (dd), (ff), (gg).
I.
Defendant FDATR violated the TSR and CFPA 11.
The TSR prohibits telemarketers from (1) requesting or receiving advance fees for both debt-relief and credit-repair services, 16 C.F.R. § 310.4(a)(2), (a)(5)(i), and (2) misrepresenting “any material aspect of the performance, efficacy, nature, or central characteristic of goods or services that are the subject of a sales offer,” as well as “any material aspect of any debt relief service,” 16 C.F.R. § 310.3(a)(2)(iii), (x). 12.
The CFPA prohibits “any covered person” from engaging in any deceptive act or practice. 12 U.S.C. §§ 5531, 5536(a)(1)(B).
13.
In connection with telemarketing debt-relief services, FDATR violated the TSR because it requested and received payments from consumers (a) before it had renegotiated, settled, reduced, or altered the terms of at least one debt pursuant to a bona fide agreement or plan with the creditor or debt collector, (b) before the customer had made at least one payment pursuant to that agreement or plan, and (c) the fee was not proportional to or a percentage of the amount saved. 16 C.F.R. § 310.4(a)(5)(i).
14.
In connection with telemarketing credit-repair services, FDATR violated the TSR because it requested and received fees before (a) the promised timeframe for providing the services had expired and (b) the seller had provided a consumer credit report demonstrating that the promised results had been achieved and the report was issued more than six months after the results were achieved. 16 C.F.R. § 310.4(a)(2).
15.
In connection with telemarketing its debt-relief services and credit-repair services, FDATR violated the TSR because it mispresented that it would reduce consumers’ student-loan payments or cut student-loan payments in half, eliminate consumers’ student-loan payments, Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 3 of 14 PageID #:402
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improve consumers’ credit scores, and remove negative credit status codes or ratings from consumers’ credit reports. 16 C.F.R. § 310.3(a)(2)(iii) and (x). These representations were false, misleading, and unsubstantiated.
16.
By violating the TSR, FDATR also violated the CFPA because a violation of the TSR committed by a person subject to the CFPA, like FDATR, is treated as a violation of a rule under section 1031 of the CFPA, 12 U.S.C. § 5531, regarding unfair, deceptive, or abusive acts or practices. 15 U.S.C. § 6102(c)(2).
17.
FDATR violated the CFPA’s prohibition of deceptive acts or practices because it mispresented that it would reduce consumers’ student-loan payments or cut student-loan payments in half, eliminate consumers’ student-loan payments, improve consumers’ credit scores, and remove negative credit status codes or ratings from consumers’ credit reports. 12 U.S.C. §§ 5531(a), 5536. These false, misleading, and unsubstantiated representations were material and likely to mislead consumers acting reasonably under the circumstances. 18.
Given the complaint’s well-pleaded allegations and FDATR’s failure to answer or defend, the Court enters a default judgment against FDATR on all counts of the complaint for violations of the TSR, 16 C.F.R. §§ 310.3 (a)(i)(viii)(C), (a)(2)(iii), (vii), (x), and 310.4(a)(2), (a)(5)(i), and for violations of the CFPA, 12 U.S.C. §§ 5531, 5536. II.
Remedies 19.
The CFPA empowers this Court to order injunctive and other relief, restitution, and civil money penalties. 12 U.S.C. § 5565.
20.
The Bureau established through competent evidence that the financial harm to consumers from FDATR’s violations was at least $2,117,133.28, which is the amount paid to FDATR by consumers, excluding refunds paid to consumers. Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 4 of 14 PageID #:403
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21.
Absent a permanent injunction, there is a reasonable likelihood that FDATR will continue to engage in the unlawful conduct alleged in the complaint or similar misconduct. FDATR’s unlawful conduct as alleged in the complaint justifies permanent injunctive relief. 22.
The Bureau is entitled to an order imposing permanent injunctive relief, requiring FDATR to make restitution of $2,117,133.28, and requiring FDATR to pay a civil money penalty in the amount of $41,123,897.
23.
The Court exercises its discretion to order injunctive and monetary relief without holding an evidentiary hearing.
24.
This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided at law, including both civil and criminal remedies. 25.
Entry of this Order is in the public interest.
DEFINITIONS 26.
The following definitions apply to this Order:
a.
Affected consumers means any person who paid an advance fee in violation of 16 C.F.R. § 310.4(a)(2) or (a)(5)(i) to FDATR or its officers, agents, servants, employees, and attorneys, or any other persons in active concert or participation with them from September 1, 2014, until the effective date.
b.
Assisting others means helping, aiding, or providing support to others, including:
i. consulting or advising in any form whatsoever; ii. providing support services;
iii. formulating or providing, or arranging for the formulation or Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 5 of 14 PageID #:404
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provision of, any advertising or marketing material, including telephone-sales scripts, solicitations, or the text of any Internet website, email, or other electronic communication or advertisement; iv. providing names of, or assisting in the generation of, potential customers;
v. performing marketing, billing, or payment services of any kind; vi. participating in or providing services related to the offering, sale, or servicing of a product or the collection of payments for a product; vii. acting or serving as an owner, officer, director, manager, principal, partner, or limited partner of any entity; and viii. investing, loaning, or providing money or anything of financial value.
c.
Consumer financial product or service has the same meaning set forth in the CFPA, 12 U.S.C. § 5481(5), including providing financial advisory services.
d.
Credit-repair service means any program or service represented to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating as described in 16 C.F.R. § 310.4(2). e.
Debt-relief service means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including a reduction in the balance, interest rate, or fees owed by a person as set forth in 16 C.F.R. § 310(o). Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 6 of 14 PageID #:405
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f.
Effective date means the date on which this Order is entered by the Court. g.
Enforcement Director means the Assistant Director of the Office of Enforcement for the Bureau, the person acting in this role, or his or her delegate.
h.
FDATR means FDATR, Inc. and its successors and assigns. i.
Financial-advisory service means services provided to consumers on individual financial matters or relating to proprietary financial products or services, including (1) providing credit counseling to any consumer and (2) providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure as set forth in 12 U.S.C. § 5481(15)(A)(viii). j.
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 FDATR based on substantially the same facts as described in the complaint.
k.
Telemarketing means a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call as set forth in 16 C.F.R. § 310.2(gg).
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ORDER I.
Ban on Telemarketing, Debt-Relief Services, and Credit-Repair Services IT IS ORDERED that:
27.
FDATR, whether acting directly or indirectly, is permanently restrained and enjoined from engaging in or assisting others with: a. telemarketing any consumer financial product or service; b. offering, marketing, selling, or providing any financial advisory service; c. offering, marketing, selling, or providing any debt-relief service; or d. offering, marketing, selling, or providing any credit-repair service. 28.
FDATR is further permanently restrained and enjoined from receiving any remuneration or other consideration from, holding any ownership interest in, or working in any capacity for any person that is engaged in advertising, marketing, promoting, offering for sale, selling, or providing any financial-advisory service; any person that is engaged in advertising, marketing, promoting, offering for sale, selling, or providing any debt-relief service; any person that is engaged in advertising, marketing, promoting, offering for sale, selling, or providing any credit-repair service, or any person that is engaged in any telemarketing of any consumer financial product or service.
II.
Prohibitions Regarding Consumer Financial Products or Services IT IS FURTHER ORDERED that:
29.
In connection with offering, marketing, selling, or providing any consumer financial product or service, FDATR, and its officers, agents, servants, employees, and attorneys, whether acting directly or indirectly or by assisting others, is permanently enjoined and restrained from misrepresenting any material aspect of the product or service, whether express or implied, Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 8 of 14 PageID #:407
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including but not limited to:
a. the benefits that a consumer will receive from the product or service; or b. the total costs or any other material term, restriction, limitation or condition of the product or service.
III.
Prohibitions on Use of Customer Information IT IS FURTHER ORDERED that:
30.
FDATR and its officers, agents, servants, employees, attorneys, and all persons who are in active concert or participation with him, who have actual notice of this Order, whether acting directly or indirectly, may not:
a. disclose, use, or benefit from customer information, including names, addresses, telephone numbers, email addresses, Social Security numbers, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that FDATR obtained before the effective date; or b. attempt to collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who entered into a contract related to debt-relief or creditrepair services.
However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order.
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IV.
Order to Pay Redress IT IS FURTHER ORDERED that:
31.
Judgment for monetary relief is entered in favor of the Bureau and against FDATR in the amount of $2,117,133.28 for the purpose of providing redress to affected consumers. The monetary judgment set forth in this section is immediately due and payable to the Bureau upon entry of this Order and is enforceable against any asset owned by, on behalf of, for the benefit of, or in trust by or for FDATR.
32.
Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or to the Bureau’s agent according to applicable statutes and regulations to be used for redress for injured consumers, including refund of moneys, restitution, damages, or other monetary relief, and for any attendant expenses for the administration of any such redress.
33.
If the Bureau determines, in its sole discretion, that redress to consumers is wholly or partially impracticable or if funds remain after redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury as disgorgement. FDATR will not have any right to challenge any actions that the Bureau or its representatives may take under this section. 34.
Payment of redress to any affected consumer under this Order may not be conditioned on that affected consumer waiving any right. V.
Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:
35.
Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the complaint and taking into account the factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil money penalty is entered in favor of the Bureau and against Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 10 of 14 PageID #:409
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FDATR in the amount of $41,123,897.
36.
Within ten days of the effective date, FDATR must pay $41,123,897 to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions. 37.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 38.
FDATR 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, FDATR 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 b. seek or accept, directly or indirectly, reimbursement or indemnification from any source, including payment made under any insurance policy, with regard to any civil money penalty paid under this Order.
39.
The civil penalty imposed by this Order represents a civil penalty owed to the United States Government, the civil penalty is not compensation for actual pecuniary loss, and thus, it is not subject to discharge under the Bankruptcy Code, 11 U.S.C. § 523(a)(7). VI.
Additional Monetary Provisions IT IS FURTHER ORDERED that:
40.
In the event of any default on FDATR’s obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment and will immediately become due and payable.
41.
FDATR relinquishes all dominion, control, and title to the funds paid under this Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 11 of 14 PageID #:410
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Order to the fullest extent permitted by law, and no part of the funds may be returned to any Defendant.
42.
The facts alleged in the complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by or on behalf of the Bureau to enforce this Order or the Bureau’s rights to any payment or monetary judgment under this Order, such as a non-dischargability complaint in any bankruptcy case 43.
The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau under section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and for such purposes this Order will have collateral estoppel effect against FDATR, even in its capacity as debtor-in-possession.
44.
Under 31 U.S.C. § 7701, FDATR, unless it already has done so, must furnish to the Bureau its taxpayer-identification numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 45.
Within thirty days of the entry of a final judgment, order, or settlement in a related consumer action, FDATR must notify the Bureau in writing of the final judgment, order, or settlement. That notification must indicate the amount of redress, if any, that FDATR 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. To preserve the deterrent effect of the civil money penalty in any related consumer action, FDATR may not argue that it is entitled to, nor may it benefit by, any offset or reduction of any 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. If the court in any related consumer action offsets or otherwise reduces the Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 12 of 14 PageID #:411
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amount of compensatory monetary remedies imposed against FDATR based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, it must, within thirty days after entry of a final order granting such offset or reduction, notify the Bureau and pay the amount of the offset or reduction 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.
VII.
Notices IT IS FURTHER ORDERED that:
46.
Unless otherwise directed in writing by the Bureau, FDATR must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “CFPB v. FDATR et al., Case No. 1:20-cv-06879,” and send them by overnight courier or 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 1700G Street, N.W.
Washington D.C. 20552
VIII.
Compliance Monitoring IT IS FURTHER ORDERED that:
47.
Within fourteen days of receipt of a written request from the Bureau, FDATR must submit compliance reports or other requested information, which must be sworn under penalty of perjury; provide sworn testimony; or produce documents. 48.
For purposes of this section, the Bureau may communicate directly with FDATR, unless FDATR retains counsel related to these communications. Case: 1:20-cv-06879 Document #: 50 Filed: 02/07/22 Page 13 of 14 PageID #:412
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49.
FDATR must permit Bureau representatives to interview any employee or other person affiliated with FDATR who has agreed to such an interview regarding: (a) this matter; (b) anything related to or associated with the conduct described the complaint; or (c) compliance with this Order. The person interviewed may have counsel present. 50.
Nothing in this Order will limit the Bureau’s lawful use of compulsory process, under 12 C.F.R. § 1080.6.
IX.
Retention of Jurisdiction IT IS FURTHER ORDERED that:
51.
The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
X.
Service IT IS FURTHER ORDERED that:
52.
This Order may be served upon FDATR by U.S. Mail, electronic mail, or United Parcel Service, either by the United States Marshal, the Clerk of the Court, or any representative or agent of the Bureau, including by sending the Order to the address on file, or last known address on file, for FDATR with the Illinois Secretary of State.
IT IS SO ORDERED.
Date: February 7, 2022
John J. Tharp, Jr.
United States District Judge
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Complaint ()
PDF of this document (15 pages)
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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
Bureau of Consumer Financial Protection, )
) Plaintiff,
)
) v.
)
Case No.
) FDATR, Inc.,
) Dean Tucci, and
) Kenneth Wayne Halverson,
)
)
Defendants.
)
COMPLAINT The Bureau of Consumer Financial Protection (Bureau) brings this action against FDATR, Inc., Dean Tucci, and Kenneth Wayne Halverson for (1) deceptive and abusive telemarketing acts or practices that violate the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101–6108, and the Telemarketing Sales Rule (TSR), 16 C.F.R. §§ 310.3, 310.4, and (2) deceptive acts or practices that violate §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536. The Bureau alleges as follows.
JURISDICTION AND VENUE 1.
This Court has subject-matter jurisdiction over this action because it concerns 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. 2.
Venue is proper in this district because Defendants are located, reside, or do business in this district. 12 U.S.C. § 5564(f).
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PARTIES 3.
The Bureau is an independent agency of the United States. 12 U.S.C. § 5491. The Bureau is charged with enforcing “Federal consumer financial laws.” 12 U.S.C. §§ 5563, 5564. The Bureau has independent litigating authority, 12 U.S.C. §§ 5564(a)-(b), including the authority to enforce the TSR with respect to the offering or provision of a consumer-financial product or service under the CFPA, 15 U.S.C. § 6105(d).
4.
FDATR, Inc. was a company incorporated in Illinois in 2014 that was involuntarily dissolved on September 29, 2020. Its principal place of business was 199 South Addison Road, Suite 104A, Wood Dale, Illinois. Through telemarketing and telephone sales, FDATR offered and purported to provide student-loan debt-relief and credit-repair services to consumers.
5.
FDATR is subject to and liable for violations of the CFPA as a “covered person” because it offered or provided a consumer-financial product or service, specifically “financial advisory services” in the form of debt-relief and credit-repair services, for use by consumers primarily for personal, family, or household purposes. 12 U.S.C. § 5481(5)(A), (6)(A), (15)(A)(viii).
6.
FDATR is also subject to and liable for violations of the TSR as (1) a “telemarketer” because, in connection with telemarketing, it initiated and received telephone calls from customers, and (2) a “seller” because, in connection with a telemarketing transaction, it provided or offered to provide services to its customers in exchange for consideration. 16 C.F.R. § 310.2(dd), (ff). FDATR engaged in “telemarketing” because it received inbound telephone calls from consumers—calls that consumers made in response to advertising placed by or on behalf of FDATR—to induce those consumers to purchase its debt-relief and credit-repair Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 2 of 15 PageID #:2
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services. 16 C.F.R. § 310.2(gg). FDATR also provided “debt relief services” under the TSR because it represented that it would alter the terms of payment for consumers’ student-loan debts. 16 C.F.R. § 310.2(o).
7.
Dean Tucci was an owner or officer of, or had managerial responsibility over, FDATR. At all material times, Tucci managed, formulated, directed, designed, controlled or had the authority to control, and materially participated in the conduct of FDATR’s affairs. He developed FDATR’s advertising, sales scripts, and training materials, and he at times managed FDATR’s day-to-day operations, including training sales people. In July 2017, Tucci transferred FDATR’s ownership to Halverson for $0, but he continued to work for the company until 2019 as a “consultant” with managerial responsibility over, among other things, FDATR’s day-to-day operations.
8.
Tucci is subject to and liable for CFPA violations as a “related person” and a “covered person.” A person is a “related person” if he or she is a “director, officer, or employee charged with managerial responsibility for . . . such covered person” or a “shareholder, consultant, joint venture partner, or other person . . . who materially participates in the conduct of the affairs of such covered person.” 12 U.S.C. § 5481(25)(C)(i), (ii). Tucci is a “related person” because he was an officer of and had managerial responsibility for FDATR—he was a key decision maker, handled day-to-day operations, and was responsible for marketing and sales practices. Tucci remained a “related person” after he transferred ownership of FDATR to Halverson in 2017 because he worked as a consultant for FDATR and materially participated in its conduct and affairs. 12 U.S.C. § 5481(25)(C)(ii). As a “related person,” Tucci is deemed a “covered person” under the CFPA. 12 U.S.C. § 5481(25)(B). Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 3 of 15 PageID #:3
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9.
Tucci is also subject to and liable for violations of the TSR as a “seller” because he arranged for FDATR to provide its services through telemarketing. 16 C.F.R. § 310.2(dd). He is also liable under the TSR for providing substantial assistance or support to FDATR because he knew or consciously avoided knowing that it was engaged in acts or practices that violated §§ 310.3(a) and 310.4 of the TSR. 16 C.F.R. § 310.3(b). He provided substantial assistance because he drafted FDATR’s telemarketing sales scripts and designed FDATR’s program and marketing materials. He knew or consciously avoided knowing that the representations being made about the program’s success were false or had no reasonable basis and could not be substantiated. 10.
Kenneth Wayne Halverson was an owner, officer, or manager of FDATR. Halverson joined FDATR in 2016 as an officer and sales floor manager. He managed the company’s day-to-day operations and took control of the company when Tucci transferred ownership to him in 2017. He purportedly closed the company in 2019. 11.
Halverson is subject to and liable for CFPA violations as a “related person” or “covered person.” A person is a “related person” if he or she is a “director, officer, or employee charged with managerial responsibility for . . . such covered person” or a “shareholder, consultant, joint venture partner, or other person . . . who materially participates in the conduct of the affairs of such covered person.” 12 U.S.C. § 5481(25)(C)(i), (ii). Halverson is a “related person” because he was an officer of and had managerial responsibility for FDATR—he handled its day-to-day operations as well as its sales force and sales practices. As a related person, Halverson is deemed a “covered person” under the CFPA. 12 U.S.C. § 5481(25)(B). 12.
Halverson is also subject to and liable for violations of the TSR as a “seller” because he arranged for FDATR to provide its debt-relief services through telemarketing. 16 C.F.R. § 310.2(dd). He is also liable under the TSR for providing substantial assistance or Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 4 of 15 PageID #:4
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support to FDATR, because he knew or consciously avoided knowing that it was engaged in acts or practices that violated §§ 310.3(a) and 310.4 of the TSR. 16 C.F.R. § 310.3(b). He provided substantial assistance because he managed the company’s sales floor and was involved in the design of the company’s program and marketing materials. He knew or consciously avoided knowing that the representations being made about the program’s success were false or had no reasonable basis and could not be substantiated. FACTUAL ALLEGATIONS 13.
FDATR offered and provided student-loan debt-relief and credit-repair services to consumers nationwide from 2011 until at least April 2019. 14.
FDATR solicited consumers through radio and television commercials as well as through its website, fedslrelief.com, and through Facebook ads that linked to the website. 15.
On both the website and in Facebook advertisements, FDATR claimed that its services would:
Reduce or Eliminate Your Payments;
Stop Wage Garnishment;
Lift IRS Tax Liens; and Improve Credit Scores.
16.
On its website, FDATR additionally claimed that it would: Cut Loan Payments in HALF;
Restore Financial Aid Eligibility;
Remove I9 Rating; and Restore your ability to get your Diplomas & Transcripts. Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 5 of 15 PageID #:5
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17.
FDATR’s advertisements instructed consumers to call a toll-free number, which connected consumers to FDATR’s telemarketing call center. 18.
Through telemarketing-sales agents, FDATR told consumers that the company had helped thousands of customers resolve their loan-payment problems. 19.
FDATR, through its telemarketing-sales agents, told consumers that its services would result in lower student-loan payments or in consumers’ student loans being forgiven and that, with respect to those student loans, consumers would be debt-free, owing $0 in payments. 20.
For consumers facing wage garnishment due to a student-loan debt, FDATR, through its telemarketing-sales agents, offered services to resolve the consumer’s wage garnishment.
21.
For consumers that enrolled in services, FDATR’s telemarketing-sales agents caused electronic documents, including a contract, a power-of-attorney form, and an invoice, to be sent to the enrolling consumer through FDATR’s customer-management platform. 22.
Before sending those documents to prospective customers, FDATR, through its telemarketing-sales agents, charged the customer, typically $1 or $99, purportedly to ensure that it had a valid payment method on file.
23.
For its services, FDATR typically charged customers a minimum of $499 as a one-time payment within two to three weeks of enrollment or $600 paid in installments over a three-to-six-month period, with customers typically making the first payment within days or weeks of enrollment.
24.
The services that FDATR typically provided to customers consisted of, at most, completing and filing loan-consolidation paperwork with the Department of Education, and it typically took three to six months to do so.
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25.
But loan consolidation alone does not achieve the results that FDATR promised to consumers—it does not necessarily result in lower loan payments, does not eliminate payments, and can result in higher payments. Moreover, loan consolidation does not improve consumers’ credit scores or remove negative credit-status codes or ratings from credit reports. 26.
FDATR had no basis to assert that its services would result in lower monthly payments, cut student-loan payments in half, or eliminate consumer’s monthly student-loan payments entirely. FDATR did not track whether its services achieved any of these results for consumers. And consumers complained that FDATR did not, in fact, achieve these results. 27.
FDATR had no basis to assert that its services would result in improved credit scores or the removal of negative credit-status codes or ratings from credit reports. In fact, FDATR did no work to improve consumers’ credit scores or to remove negative credit-status codes or ratings from credit reports. And FDATR did not track whether its services achieved these promised results. FDATR did not check consumers’ credit scores before or after the company performed services for consumers and had no way of knowing how, or to what extent, even a successful loan consolidation would impact a consumer’s credit score. COUNT I Abusive Telemarketing Acts or Practices That Violate the TSR—Debt-Relief Services (Against All Defendants) 28.
The allegations in paragraphs 1 to 27 are incorporated here by reference. 29.
It is an abusive telemarketing act or practice and a TSR violation for any seller or telemarketer to request or receive payment of any fee or consideration for any debt-relief service until and unless:
a.
the seller or telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 7 of 15 PageID #:7
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debt-management plan, or other such valid contractual agreement executed by the customer;
b.
the customer has made at least one payment pursuant to that settlement agreement, debt-management plan, or other valid contractual agreement between the customer and the creditor or debt collector; and c.
to the extent that debts enrolled in a service are renegotiated, settled, reduced, or otherwise altered individually, the fee or consideration either (1) bears the same proportional relationship to the total fee for renegotiating, settling, reducing, or altering the terms of the entire debt balance as the individual debt amount bears to the entire debt amount; or (2) is a percentage of the amount saved as a result of the renegotiation, settlement, reduction, or alteration. 16 C.F.R. § 310.4(a)(5)(i). 30.
In numerous instances, in connection with telemarketing student-loan debt-relief services, Defendants requested and received payment of a fee or consideration for a debt-relief service before they renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt-management plan, or other such valid contractual agreement executed by the customer and the customer made at least one payment pursuant to that agreement. And FDATR’s fee or consideration was not proportional to or a percentage of the amount saved as a result of its services. 16 C.F.R. § 310.4(a)(5)(i). 31.
Defendants, therefore, engaged in abusive telemarketing acts or practices that violated the TSR. 16 C.F.R. § 310.4(a)(5)(i).
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32.
In addition to being sellers under the TSR, Tucci and Halverson also provided substantial assistance or support to FDATR while they knew or consciously avoided knowing that FDATR had engaged in an act or practice that violated the TSR. 16 C.F.R. § 310.3(b). COUNT II Abusive Telemarketing Acts or Practices That Violate the TSR—Credit-Repair Services (Against All Defendants)
33.
The allegations in paragraphs 1 to 27 are incorporated here by reference. 34.
It is an abusive telemarketing act or practice and TSR violation for any seller or telemarketer to request or receive payment of any fee or consideration for goods or services represented to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating, until:
a.
the timeframe in which the seller has represented that all of the goods or services will be provided to that person has expired; and b.
the seller has provided the person with documentation in the form of a consumer report from a consumer-reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved. 16 C.F.R. § 310.4(a)(2). 35.
Defendants made representations to consumers that its services would remove derogatory information from, or improve, consumers’ credit histories, credit reports, or credit ratings, but Defendants did not provide any such services. 36.
Defendants routinely requested and received payment of a fee or consideration for its credit-repair services before (a) the timeframe in which they represented that all of their goods or services would be provided to the consumer expired, and (b) they provided the consumer with documentation in the form of a consumer report from a consumer-reporting agency Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 9 of 15 PageID #:9
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demonstrating that the promised results were achieved, such report having been issued more than six months after the results were achieved.
37.
Defendants, therefore, engaged in abusive telemarketing acts or practices that violated the TSR, 16 C.F.R. § 310.4(a)(2).
38.
In addition to being sellers under the TSR, Tucci and Halverson also provided substantial assistance or support to FDATR while they knew or consciously avoided knowing that FDATR had engaged in an act or practice that violated the TSR. 16 C.F.R. § 310.3(b). COUNT III Deceptive Telemarketing Acts or Practices That Violate the TSR (Against All Defendants)
39.
The allegations in paragraphs 1 to 27 are incorporated here by reference. 40.
It is a deceptive telemarketing act or practice under the TSR for a seller or telemarketer to misrepresent any material aspect of the performance, efficacy, nature, or central characteristics of its services. 16 C.F.R. § 310.3(a)(2)(iii). 41.
It is also a deceptive marketing practice under the TSR for a seller or telemarketer of a debt-relief service to misrepresent any material aspect of any debt-relief service, including: (1) the percentage of the debt amount that a customer may save through the service, (2) the effect of the service on collection efforts of the customer’s creditors or debt collectors, and (3) the effect of the service on a customer’s creditworthiness. 16 C.F.R. § 310.3(a)(2)(x). And, when making representations, a seller or telemarketer must have a reasonable basis to substantiate its claims. Telemarketing Sales Rule, Statement of Basis and Purpose, 75 Fed. Reg. 48,458, 48,500- 501 (Aug. 10, 2010).
42.
In numerous instances, in connection with telemarketing their services, Defendants misrepresented, directly or indirectly, expressly or by implication, material aspects of Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 10 of 15 PageID #:10
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the student-loan debt-relief services that they offered, sold, or provided to consumers, including that its services would result in:
a.
reduced student-loan payments or cut student-loan payments in half; b.
eliminated student-loan payments;
c.
improved credit scores; and d.
the removal of negative credit-status codes or ratings from credit reports. 43.
But, in numerous instances, FDATR’s actions did not result in the elimination of consumers’ student-loan payments, did not cut consumers’ student-loan payments, did not always reduce consumers’ student-loan payments, did not improve consumers’ credit scores, and did not remove negative credit-status codes or ratings from consumers’ credit reports. Further, FDATR did not provide any services related to credit reporting or scores and in no way tracked whether it achieved the results advertised.
44.
Accordingly, these claims were false—FDATR rarely if ever achieved the promised results and, in some instances, did not provide the promised services at all. 45.
These claims were also unsubstantiated—FDATR cannot substantiate these claims because it did not track its results and it had no way of knowing whether it achieved the promised results.
46.
Defendants, therefore, engaged in deceptive telemarketing acts or practices that violated the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x). 47.
In addition to being sellers under the TSR, Tucci and Halverson also provided substantial assistance or support to FDATR while they knew or consciously avoided knowing that FDATR had engaged in an act or practice that violated the TSR. 16 C.F.R. § 310.3(b).
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COUNT IV TSR Violations Constitute Violations of the CFPA (Against All Defendants)
48.
The allegations in paragraphs 1 to 27 are incorporated here by reference. 49.
Under the CFPA, it is unlawful for any covered person or service provider to commit any act or omission that violates a “Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A).
50.
A violation of the TSR that is committed by a person subject to the CFPA shall be treated as a violation of a rule under § 1031 of the CFPA, 12 U.S.C. § 5531, regarding unfair, deceptive, or abusive acts or practices. 15 U.S.C. § 6102(c)(2). 51.
Therefore, a violation of the TSR by a covered person is also a violation of the CFPA.
52.
Because Defendants are covered persons and have committed an act or omission that violated the TSR, they also violated the CFPA. 12 U.S.C. § 5536(a)(1)(A). COUNT V Deceptive Acts or Practices That Violate the CFPA (Against All Defendants)
53.
The allegations in paragraphs 1 to 27 are incorporated here by reference. 54.
Under the CFPA, it is unlawful for any covered person or service provider to engage in a deceptive act or practice in connection with any transaction with a consumer for a consumer-financial product or service, or the offering of a consumer-financial product or service. 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).
55.
An act or practice is deceptive if it involves a material misrepresentation or omission that is likely to mislead consumers acting reasonably under the circumstances. Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 12 of 15 PageID #:12
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56.
In numerous instances, in connection with the offering or provision of studentloan debt-relief and credit-repair services, Defendants represented, directly or indirectly, expressly or by implication, to consumers that its services would result in: a.
reduced student-loan payments or cut student-loan payments in half; b.
eliminated student-loan payments;
c.
improved credit scores; and d.
the removal of negative credit-status codes or ratings from credit reports. 57.
These claims were material because they were the main services that FDATR offered—debt relief and credit repair—and were the outcomes that financially distressed consumers paid FDATR to pursue. Moreover, these claims were likely to affect consumers’ decisions to enroll in FDATR’s program and pay FDATR for its services. 58.
These claims were false—FDATR rarely if ever achieved the promised results and, in some instances, did not provide the promised services at all. 59.
These claims were also unsubstantiated—FDATR cannot substantiate these claims because it did not track its results and it had no way of knowing whether it achieved the promised results.
60.
Consumers reasonably relied on FDATR’s express claims about the results its services would achieve, and these claims misled financially distressed consumers into paying substantial amounts of money to FDATR to their detriment. 61.
Defendants, therefore, engaged in deceptive acts or practices that violated the CFPA. 12 U.S.C. §§ 5531, 5536(a)(1).
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DEMAND FOR RELIEF As permitted by 12 U.S.C. § 5565, the Bureau requests that the Court: a.
permanently enjoin Defendants from further violations of the TSR and CFPA; b.
grant additional equitable relief as the Court may deem to be just and proper, including the rescission of contracts; c.
award monetary relief against Defendants, including the refund of monies paid and restitution;
d.
order disgorgement of ill-gotten revenues against Defendants; e.
impose civil money penalties against Defendants; and f.
award the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.
Dated: November 20, 2020
Respectfully submitted, THOMAS G. WARD
Enforcement Director
JEFFREY PAUL EHRLICH
(FL Bar No. 51561)
Deputy Enforcement Director
OWEN MARTIKAN
Assistant Deputy Enforcement Director
(CA Bar No. 177104)
/s/ Carmen L. Christopher CARMEN L. CHRISTOPHER
(CA Bar No. 231508)
Senior Litigation Counsel
Bureau of Consumer Financial Protection
1700 G Street, NW
Washington DC, 20552
Telephone: (202) 754-0329
[email protected] KRISTINA D. BETTS
(AZ Bar No. 024859)
Senior Litigation Counsel
Bureau of Consumer Financial Protection Case: 1:20-cv-06879 Document #: 1 Filed: 11/20/20 Page 14 of 15 PageID #:14
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1700 G Street, NW
Washington DC, 20552
Telephone: (202) 834-2723
Attorneys for Plaintiff
Bureau of Consumer Financial Protection
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Dismissal ()
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UNITED STATES DISTRICT COURT FOR THE Northern District of Illinois − CM/ECF LIVE, Ver 6.3.3 Eastern Division Bureau of Consumer Financial Protection Plaintiff, v.
Case No.: 1:20−cv−06879 Honorable John J. Tharp Jr.
FDATR, Inc, et al.
Defendant.
NOTIFICATION OF DOCKET ENTRY This docket entry was made by the Clerk on Friday, February 26, 2021: MINUTE entry before the Honorable John J. Tharp, Jr: Upon receipt of the plaintiff's notice of voluntary dismissal without prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i), Defendant Kenneth Wayne Halverson is dismissed from this action. Mailed notice(air, ) ATTENTION: This notice is being sent pursuant to Rule 77(d) of the Federal Rules of Civil Procedure or Rule 49(c) of the Federal Rules of Criminal Procedure. It was generated by CM/ECF, the automated docketing system used to maintain the civil and criminal dockets of this District. If a minute order or other document is enclosed, please refer to it for additional information.
For scheduled events, motion practices, recent opinions and other information, visit our web site at www.ilnd.uscourts.gov.
Case: 1:20-cv-06879 Document #: 18 Filed: 02/26/21 Page 1 of 1 PageID #:40
Dismissal ()
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Page 32
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
Bureau of Consumer Financial Protection, )
) Plaintiff,
)
) v.
)
Case No. 1:20-cv-06879
) FDATR, Inc., et al.,
)
Judge John J. Tharp
) Defendants.
)
Magistrate M. David Weisman
)
NOTICE OF VOLUNTARY DISMISSAL OF DEFENDANT KENNETH WAYNE HALVERSON UNDER RULE 41(a)
Plaintiff Bureau of Consumer Financial Protection respectfully notifies this Court that it voluntarily dismisses Defendant Kenneth Wayne Halverson from this action, without prejudice, under Rule 41(a)(1)(A)(i). Under that rule, a plaintiff may dismiss an action without a court order by filing a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. Defendant Halverson has served neither an answer nor a motion for summary judgment, and he is now deceased. Plaintiff is not dismissing any other Defendant.
Dated: February 25, 2021
Respectfully submitted,
/s/ Carmen L. Christopher Carmen L. Christopher (CA Bar No. 231508)
(202) 754-0329; [email protected] Kristina D. Betts (AZ Bar No. 024859)
(202) 834-2723; [email protected] Local Counsel: Mary Elizabeth Olson (312) 610-8977; [email protected] Bureau of Consumer Financial Protection
1700 G Street, NW
Washington DC, 20552
Attorneys for Plaintiff
Bureau of Consumer Financial Protection
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CERTIFICATE OF SERVICE
I hereby certify that I caused a true and correct copy of the foregoing Notice of Voluntary Dismissal of Defendant Kenneth Wayne Halverson Under Fed. R. Civ. P. 41(a), which was filed with the Clerk of the Court via the CM/ECF system, to be served on the Defendants on February 25, 2021, as follows:
Defendant FDATR, Inc., by U.S. mail at its last known addresses of (1) 2N075 Linda Lane, Carol Stream, IL 60188, and (2) 250 South Gary Avenue #104, Bloomingdale, IL 60108.
Defendant Kenneth Wayne Halverson (deceased) by U.S. mail at his last known addresses of (1) 2N075 Linda Lane, Carol Stream, IL 60188, and (2) 250 South Gary Avenue #104, Bloomingdale, IL 60108.
Defendant Dean Tucci via his counsel Andrew B. Lustigman by U.S. mail at Olshan Frome Wolosky LLP, 1325 Avenue of the Americas, New York, NY 10019, and by electronic mail at [email protected].
/s/ Carmen L. Christopher
Carmen L. Christopher
Case: 1:20-cv-06879 Document #: 17 Filed: 02/25/21 Page 2 of 2 PageID #:39
Judgment ()
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Page 34
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION Bureau of Consumer Financial Protection, )
) Case No. 1:20-cv-06879 Plaintiff,
)
)
v.
) Judge Georgia N. Alexakis
)
FDATR, Inc., et al.,
)
)
Defendants.
)
FINAL JUDGMENT AND INJUNCTION ORDER AGAINST DEFENDANT DEAN TUCCI
Plaintiff Bureau of Consumer Financial Protection (“Bureau”) commenced this civil action on November 20, 2020, to obtain an injunction, monetary relief, and civil penalties from Defendants FDATR, Inc. and Dean Tucci. The complaint alleges violations of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531 and 5536, 12 U.S.C. §§ 5531(a), 5536(a)(1), and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, the implementing regulation of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-08.
The Court entered a default judgment order against Defendant FDATR on February 7, 2022. ECF No. 50. The Bureau thereafter moved for summary judgment under Federal Rule of Civil Procedure 56 against Defendant Dean Tucci. On January 10, 2025, after considering the pleadings, declarations, exhibits, summary judgment briefing, and the entire record in this matter, this Court granted the Bureau’s motion for summary judgment against Defendant Tucci on all claims as to his liability (Summary Judgment Memorandum Opinion and Order). ECF No. 106. The Court finds good cause to grant the following relief against Defendant Tucci. Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 1 of 18 PageID #:1651
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FINDINGS 1.
This Court has subject-matter jurisdiction over this action because it is brought under “[f]ederal 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 Defendant Tucci, and venue is proper here, because he is located, resides, or does business in this district. 12 U.S.C. § 5564(f); 28 U.S.C. § 1391(b). 2.
The CFPA authorizes this Court to order any appropriate legal and equitable relief against Defendant Tucci for his violations of the TSR and the CFPA, including a permanent or temporary injunction, limits on the activities or functions of a person, restitution, refund of moneys, payment of damages, and civil money penalties. 12 U.S.C. §§ 5564(a), 5565(a)(2). 3.
The Court’s findings in the Summary Judgment Memorandum Opinion and Order (ECF No. 106) are hereby incorporated by reference in this Order and entry of this Order is in the public interest.
DEFINITIONS 4.
The following definitions apply to this Order:
a.
“Affected Consumers” means any person who paid an advance fee in violation of 16 C.F.R. § 310.4(a)(2) or (a)(5)(i) to Defendant Tucci or his company, Defendant FDATR, Inc., or their officers, agents, servants, employees, and attorneys, or any other persons in active concert or participation with them, from September 1, 2014, until the Effective Date. b.
“Assisting Others” means helping, aiding, or providing support to others, including:
i. consulting or advising in any form whatsoever;
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ii. providing support services;
iii. formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including telephone-sales scripts, solicitations, or the text of any Internet website, email, or other electronic communication or advertisement;
iv. providing names of, or assisting in the generation of, potential customers;
v. performing marketing, billing, or payment services of any kind; vi. participating in or providing services related to the offering, sale, or servicing of a product or the collection of payments for a product;
vii. acting or serving as an owner, officer, director, manager, principal, partner, or limited partner of any entity; and viii. investing, loaning, or providing money or anything of financial value.
c.
“Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in section 1002(5) of the CFPA, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to, providing financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services, including providing credit counseling to any consumer or providing services to assist a consumer Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 3 of 18 PageID #:1653
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with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure. d.
“Credit-Repair Service” means any program or service represented to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating as described in 16 C.F.R. § 310.4(a)(2).
e.
“Debt-Relief Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including a reduction in the balance, interest rate, or fees owed by a person as set forth in 16 C.F.R. § 310.2(o).
f.
“Effective Date” means the date on which this Order is entered by the Court.
g.
“Enforcement Director” means the Enforcement Director of the Enforcement Division for the Consumer Financial Protection Bureau, the person acting in this role, or his or her delegate. h.
“Financial-Advisory Service” means services provided to consumers on individual financial matters or relating to proprietary financial products or services, including (1) providing credit counseling to any consumer and (2) providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure as set forth in 12 U.S.C. § 5481(15)(A)(viii). Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 4 of 18 PageID #:1654
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i.
“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 Defendants based on substantially the same facts as described in the Complaint.
j.
“Telemarketing” means a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call as set forth in 16 C.F.R. § 310.2(ii).
CONDUCT PROVISIONS I.
Ban on Financial-Advisory Services, Debt-Relief Services, and Credit-Repair Services
IT IS ORDERED that:
5.
For ten (10) years from the Effective Date, Defendant Tucci, whether acting directly or indirectly, is restrained and enjoined from engaging in or Assisting Others with marketing, advertising, promoting, offering for sale, selling, providing, or Telemarketing any: a. Financial-Advisory Service;
b. Debt-Relief Service; or c. Credit-Repair Service.
Nothing in this Order shall be read as an exception to this paragraph. 6.
For ten (10) years from the Effective Date, Defendant Tucci is restrained and enjoined from receiving any remuneration or other consideration from, holding any ownership Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 5 of 18 PageID #:1655
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interest in, or working in any capacity for any person or entity that is engaged in marketing, advertising, promoting, offering for sale, selling, providing, or Telemarketing any: a. Financial-Advisory Service;
b. Debt-Relief Service; or c. Credit-Repair Service.
Nothing in this Order shall be read as an exception to this paragraph. II.
Prohibitions Regarding Consumer Financial Products or Services IT IS FURTHER ORDERED that:
7.
Defendant Tucci and his agents, servants, employees, attorneys, and all other persons in active concert or participation with him who receive actual notice of this Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, selling, or providing of any Consumer Financial Product or Service, may not violate sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531, 5536, and is prohibited from misrepresenting or Assisting Others in misrepresenting, expressly or impliedly, any material aspect of the product or service, including but not limited to: a. the benefits that a consumer will receive from the product or service; and b. the total costs or any other material term, restriction, limitation or condition of the product or service.
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III.
Prohibitions on Use of Customer Information IT IS FURTHER ORDERED that:
8.
Defendant Tucci and his agents, servants, employees, attorneys, and all other persons in active concert or participation with him who receive actual notice of this Order, whether acting directly or indirectly, may not: a. disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendant Tucci or Defendant FDATR obtained before the Effective Date; or b. attempt to collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who entered into a contract with Defendant Tucci or Defendant FDATR related to a Debt-Relief or Credit-Repair Service. However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order. MONETARY PROVISIONS IV.
Order to Pay Redress IT IS FURTHER ORDERED that:
9.
A judgment for monetary relief is entered in favor of the Bureau and against Defendant Tucci in the amount of $2,117,133.28. Defendant Tucci and Defendant FDATR, Inc. are jointly and severally liable for this judgment. Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 7 of 18 PageID #:1657
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10.
The monetary judgment set forth in this section is immediately due and payable to the Bureau upon entry of this Order and is enforceable against any asset owned by, on behalf of, for the benefit of, or in trust by or for Defendant Tucci. Defendant Tucci must pay to the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, $2,117,133.28 in full satisfaction of the judgment as ordered in Paragraph 9 of this Section.
11.
Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or the Bureau’s agent according to applicable statutes and regulations to be used for redress for Affected Consumers, including refund of moneys, legal restitution, damages or other monetary relief, and for any attendant expenses for the administration of any such redress.
12.
If the Bureau determines, in its sole discretion, that redress to consumers is wholly or partially impracticable, or if funds remain after redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury. Defendant will have no right to challenge any actions that the Bureau or its representatives may take under this Section. 13.
Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. V.
Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:
14.
Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law described in the Summary Judgment Memorandum Opinion and Order (ECF No. 106) and taking into account the factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 8 of 18 PageID #:1658
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money penalty is entered in favor of the Bureau and against Defendant Tucci in the amount of $41,123,897.
15.
The civil penalty set forth in this section is immediately due and payable to the Bureau upon entry of this Order and is enforceable against any asset owned by, on behalf of, for the benefit of, or in trust by or for Defendant Tucci. Defendant Tucci must pay to the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, $41,123,897 in full satisfaction of the judgment as ordered in Paragraph 14 of this Section.
16.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 17.
Defendant Tucci, for all purposes, must treat the civil money penalty paid under this Order as a penalty paid to the government. Regardless of how the Bureau ultimately uses those funds, Defendant Tucci 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 b. 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. 18.
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Defendant Tucci may not argue that he is entitled to, nor may he benefit by, 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. If the court in any Related Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 9 of 18 PageID #:1659
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Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against Defendant Tucci based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, Defendant Tucci must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau, and pay the amount of the offset or reduction 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.
19.
The civil penalty imposed by the Order represents a civil penalty owed to the United States Government, is not compensation for actual pecuniary loss, and thus, it is not subject to discharge under the Bankruptcy Code, 11 U.S.C. § 523(a)(7). VI.
Additional Monetary Provisions IT IS FURTHER ORDERED that:
20.
In the event of any default on Defendant Tucci’s obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the Effective Date to the date of payment and will immediately become due and payable.
21.
Defendant Tucci relinquishes all dominion, control, and title to the funds paid under this Order to the fullest extent permitted by law, and no part of the funds may be returned to Defendant.
22.
The facts described in the Summary Judgment Memorandum Opinion and Order (ECF No. 106) will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by or on Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 10 of 18 PageID #:1660
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behalf of the Bureau to enforce this Order or the Bureau’s rights to any payment or monetary judgment under this Order, such as a non-dischargeability complaint in any bankruptcy case. 23.
The facts described in the Summary Judgment Memorandum Opinion and Order (ECF No. 106) establish all elements necessary to sustain an action by the Bureau under section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and for such purposes this Order will have collateral estoppel effect against Defendant Tucci, even in his capacity as debtor-in-possession.
24.
Under 31 U.S.C. § 7701, Defendant Tucci, unless he already has done so, must furnish to the Bureau his taxpayer-identification numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 25.
Within 30 days of the entry of a final judgment, order, or settlement in a Related Consumer Action, Defendant Tucci must notify the Enforcement Director of the final judgment, order, or settlement in writing. That notification must indicate the amount of redress, if any, that Defendant Tucci 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. 26.
Upon written request of a representative of the Bureau, any consumer reporting agency must furnish consumer reports to the Bureau concerning Defendant Tucci under section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C.§ 168l b(a)(1), which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
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COMPLIANCE PROVISIONS VII.
Reporting Requirements IT IS FURTHER ORDERED that:
27.
Defendant Tucci must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendant Tucci; or a change in Defendant Tucci’s name or address. Defendant Tucci must provide this notice, if practicable, at least 30 days before the development or as soon as practicable after the learning about the development, but in any case, no longer later than 14 days after the development.
28.
Within 7 days of the Effective Date, Defendant Tucci must: a.
designate at least one telephone number and email and postal addresses as points of contact that the Bureau may use to communicate with him; b.
identify all businesses for which he is the majority owner, or that he directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses;
c.
describe the activities of each such identified business, including the products and services offered, and the means of advertising, marketing, and sales; d.
identify his telephone numbers and all email, Internet, physical, and postal addresses, including all residences; and Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 12 of 18 PageID #:1662
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e.
describe in detail his involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including his title, role, responsibilities, participation, authority, control, and ownership. 29.
Defendant Tucci must report any change in the information required to be submitted under Paragraph 28 if practicable, at least 30 days before the change, but in any case no later than 14 days after the change.
VIII.
Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:
30.
Within 7 days of the Effective Date, Defendant Tucci must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury.
31.
Within 30 days of the Effective Date, Defendant Tucci, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of the Complaint, the Summary Judgment Memorandum Opinion and Order (ECF No. 106), and this Order to each of its owners, board members, and executive officers as well as to any managers, employees, service providers, and other agents and representatives who have responsibilities related to the subject matter of the Order. 32.
For 5 years from the Effective Date, Defendant Tucci, for any business of which he is the majority owner or which he directly or indirectly controls, must deliver a copy of the Complaint, the Summary Judgment Memorandum Opinion and Order (ECF No. 106), and this Order to any business entity resulting from any change in structure referred to in Section VII, any future board members and executive officers, as well as any managers, employees, service Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 13 of 18 PageID #:1663
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providers, and other agents and representatives who will have responsibilities related to the subject matter of the Order before they assume their responsibilities. 33.
Defendant Tucci must secure a signed and dated statement acknowledging receipt of a copy of this Order, within 30 days of delivery, from all persons receiving a copy of this Order under this Section.
34.
Ninety days from the Effective Date, Defendant Tucci must provide the Bureau a list of all persons and their titles to whom this Order has been delivered through that date under Paragraphs 31-32 and a copy of all signed and dated statements acknowledging the receipt of this Order under Paragraph 33.
IX.
Recordkeeping IT IS FURTHER ORDERED that:
35.
Defendant Tucci must create and retain for 10 years from the Effective Date, the following business records for any business of which he is a majority owner or which he directly or indirectly controls:
a.
all documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau; b.
copies of all sales scripts; training materials; advertisements; websites; and other marketing materials, including any such materials used by a third party on his behalf or used by him to benefit a third party; and c.
all consumer complaints and refund requests (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests.
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36.
All documents and records must be maintained in their original electronic format. Data must be maintained in such a way that access, retrieval, auditing and production are not hindered.
37.
Defendant Tucci must make the documents identified in Paragraph 35 available to the Bureau upon request.
X.
Notices IT IS FURTHER ORDERED that:
38.
Unless otherwise directed in writing by the Bureau, Defendant Tucci must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line “Bureau of Consumer Financial Protection v. FDATR, Inc., et al., Case No. 1:20-cv-06879-NDIL” and send them by email to [email protected]:
ATTN: Enforcement Director Consumer Financial Protection Bureau Enforcement Division
XI.
Cooperation with the Bureau IT IS FURTHER ORDERED that:
39.
Defendant Tucci must cooperate fully to help the Bureau determine the identity and location of, as well as the amount of injury sustained by, each Affected Consumer. Defendant Tucci must provide such information in his agents’ possession or control within 14 days of receiving a written request from the Bureau. Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 15 of 18 PageID #:1665
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40.
Defendant Tucci must cooperate fully with the Bureau in this matter and in any investigation or lawsuit related to or associated with the conduct described in the Complaint. Defendant Tucci must provide truthful and complete information, evidence, and testimony. Defendant Tucci must appear and cause his officers, employees, representatives, or agents to appear for interviews, discovery, hearings, trials, and any other proceedings that the Bureau may reasonably request upon 14 days written notice, or other reasonable notice, at such places and times as the Bureau may designate, without the service of compulsory process. XII.
Compliance Monitoring IT IS FURTHER ORDERED that:
41.
Within 14 days of receipt of a written request from the Bureau, Defendant Tucci must submit additional compliance reports or other requested information, including sworn testimony or documents, which must be made under penalty of perjury regarding (a) this matter; (b) anything related to or associated with the conduct described in the Complaint or the Summary Judgment Memorandum Opinion and Order (ECF No. 106); or (c) compliance with the Order.
42.
For purposes of this Section, the Bureau may communicate directly with Defendant Tucci, unless he retains counsel related to these communications. 43.
Defendant Tucci must permit Bureau representatives to interview any employee or other person affiliated with him who has agreed to such an interview regarding: (a) this matter; (b) anything related to or associated with the conduct described the Complaint or the Summary Judgment Memorandum Opinion and Order (ECF No. 106); or (c) compliance with this Order. The person interviewed may have counsel present. Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 16 of 18 PageID #:1666
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44.
Nothing in this Order will limit the Bureau’s lawful use of compulsory process, under 12 C.F.R. § 1080.6.
XIII.
Transfer 45.
Should Defendant Tucci seek to transfer or assign any part of FDATR’s operations that are subject to this Order, Defendant Tucci must, as a condition of sale, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Order.
XIV.
Retention of Jurisdiction IT IS FURTHER ORDERED that:
46.
The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
XV.
Service IT IS FURTHER ORDERED that:
47.
This Order may be served upon Defendant Tucci by electronic mail, certified mail, or United Parcel Service, either by the United States Marshal, the Clerk of the Court, or any representative or agent of the Bureau.
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IT IS SO ORDERED:
GEORGIA N. ALEXAKIS UNITED STATES DISTRICT JUDGE DATED: May 9, 2025 Case: 1:20-cv-06879 Document #: 133 Filed: 05/09/25 Page 18 of 18 PageID #:1668