Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC

Agency: Consumer Financial Protection Bureau
Date: July 13, 2023
Type: enforcement action
Source: consumerfinance.gov/enforcement/actions/prehired-llc-et-al/
Pages: 54
PDFs: 2 documents (links below)

Documents in this case

Complaint · July 2023 · 34 p.
Stipulation · Nov. 2023 · 19 p.

Case summary

On July 13, 2023, the Bureau and several state partners filed a complaint in an adversary proceeding against Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC. Prehired has its principal place of business in Delaware and, prior to filing bankruptcy, operated a private, for-profit vocational training program for software sales representatives. Prehired charged up to $30,000 for its program and encouraged consumers who could not pay upfront to enter into income share loans. Prehired’s income share loans required consumers to make minimum payments equal to between 12.5% and 16% of their gross income for 4 to 8 years or until they had paid a total of $30,000, whichever was sooner. Prehired transferred ownership of many of these loans to other entities, including Prehired Recruiting and Prehired Accelerator. The complaint alleged that Prehired deceptively represented that its income share loans were not loans; deceptively represented that consumers would pay nothing until they had a job making at least $60,000 a year; and failed to disclose key financing terms required by the Truth in Lending Act (TILA) and Regulation Z. The complaint also alleged that Prehired Recruiting engaged in unfair acts and practices by filing debt collection lawsuits in a distant forum when consumers neither lived in that forum nor were in that forum when they executed the financing agreement. The complaint further alleged that Prehired Recruiting and Prehired Accelerator violated the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act of 2010 (CFPA) by deceptively inducing consumers to enter into settlement agreements, and the FDCPA by claiming the consumers owed more than they did. The attorneys general from Washington, Oregon, Delaware, Minnesota, Illinois, Wisconsin, Massachusetts, North Carolina, South Carolina, and Virginia, and California’s Department of Financial Protection and Innovation joined the action. The Court signed the stipulated judgment and it became final on November 20, 2023. The stipulated judgment requires Prehired to pay consumer redress and prejudgment interest totaling $4,248,249.30 and a $1 civil money penalty. It also requires defendants to cease doing business and prohibits them from participating or assisting others in advertising, selling, or assisting in providing any consumer financial product or services relating to vocational education services. The stipulated judgment also voids, and prohibits defendants from collecting on, Prehired’s income share loans or other consumer agreements that financed vocational education services.

Complaint (July 2023)

PDF of this document (34 pages)

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ADVERSARY PROCEEDING COMPLAINT - 1

ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

PREHIRED, LLC, et al,

Debtors1.

Chapter 7

Case No. 22-11007 (JTD)

(Jointly Administered) STATE OF WASHINGTON; STATE OF OREGON; CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION;

STATE OF DELAWARE;

STATE OF MINNESOTA; STATE OF ILLINOIS; STATE OF SOUTH CAROLINA; STATE OF NORTH CAROLINA ex rel. Attorney General Joshua H. Stein.; COMMONWEALTH OF MASSACHUSETTS;

COMMONWEALTH OF VIRGINIA;

STATE OF WISCONSIN; and CONSUMER FINANCIAL PROTECTION BUREAU,

Plaintiffs,

PREHIRED, LLC, a Delaware limited liability company;

PREHIRED RECRUITING, LLC, a Delaware limited liability company; and

Adv. No.

ADVERSARY PROCEEDING COMPLAINT

1 The Debtors in the above-captioned chapter 7 cases, along with the last four digits of each Debtors’ federal tax identification number and each Debtors’ former business address, are Prehired Recruiting, LLC (4322), 8 The Green, Suite B, Dover, DE 19901; Prehired Accelerator, LLC (7910), 7910 4th St. N, St. Petersburg, FL, 33702; and Prehired, LLC (0436), 8 The Green, Suite B, Dover, DE 19901. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 1 of 34

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ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

PREHIRED ACCELERATOR, LLC, a Florida limited liability company,

Defendants.

Plaintiffs State of Washington, by Attorney General Robert W. Ferguson (Washington), State of Oregon, the California Department of Financial Protection and Innovation (DFPI), State of Delaware, State of Minnesota, State of Illinois, State of South Carolina, State of North Carolina, Commonwealth of Massachusetts, Commonwealth of Virginia, State of Wisconsin, and the Consumer Financial Protection Bureau (the Bureau) bring this action against Prehired, LLC (Prehired), Prehired Recruiting, LLC (Prehired Recruiting), and Prehired Accelerator, LLC (Prehired Accelerator) and allege as follows:

INTRODUCTION 1.

Prior to this Chapter 7 Bankruptcy proceeding, Defendant Prehired operated a private, for-profit vocational training program which did business with consumers in an unfair and deceptive manner.

Prehired advertised that its program would train consumers for a “6-figure” career in software sales.

The price of Prehired’s program varied over time. In 2018, Prehired’s stated price was approximately $2,500. By 2019, Prehired’s stated cash price had increased to $15,000. The increase was not in connection or in proportion with any increase in the cost or value of Prehired’s services to consumers.

Prehired encouraged consumers who could not afford this sum to finance its training program via an “Income Share Agreement” (ISA), a type of student loan. 5.

Depending on the year offered, Prehired’s ISAs required consumers to make minimum payments equal to between 12.5% and 16% of their gross income for 4 to 8 years or until they have paid a total of $30,000, whichever came first. Thus, in 2019, consumers with an Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 2 of 34

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ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

ISA were required to pay up to double the $15,000 cash price. Prehired failed to advise consumers about the cost of these loans, and deceptively represented that the ISAs are not loans and did not create debt. Prehired also represented that consumers would pay nothing until they got a job and “partner[ed] with” Prehired in their career. However, Prehired required consumers to pay even if they never obtained a job that Prehired purported to train them for, and, in many cases, calculated minimum monthly payments based on projected rather than actual income. 6.

Defendant Prehired transferred ownership of many of these financing agreements to other entities, including Defendants Prehired Recruiting and Prehired Accelerator (collectively, the Debt Collector Defendants). The Debt Collector Defendants demanded and collected payments, pursued debt collection actions by filing in a distant and not appropriately disclosed forum, and misled consumers into signing settlement agreements that had little benefit for consumers.

LEGAL AUTHORITY 7.

Plaintiffs bring this action under Section 1042 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. § 5552(a), which authorizes Plaintiffs to enforce the CFPA and to secure, and the Court to order, permanent injunctive relief, monetary relief, and other relief for Defendant’s acts or practices that violate the CFPA. 8.

Plaintiffs bring this action to enforce Section 1036(a)(1)(B) of the CFPA, 12 U.S.C. § 5536(a)(1)(B), which makes it unlawful for covered persons and service providers to engage in unfair, deceptive, or abusive acts or practices 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).

Plaintiffs also bring this action to enforce Section 1036(a)(1)(A) of the CFPA, 12 U.S.C. § 5536(a)(1)(A), which makes it unlawful for covered persons and service providers to, among other things, commit any act or omission in violation of a Federal consumer financial law, such as the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (TILA) and the Fair Debt Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 3 of 34

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Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA). See 12 U.S.C. § 5481(14) (defining “federal consumer financial law”); id. § 5481(12)(H), (O). 10.

Defendants are “covered persons” within the meaning of the CFPA. 12 U.S.C. § 5481(6).

11.

At all times relevant hereto, Defendants offered or provided consumer financial products or services by (1) extending credit in the form of ISAs and other instruments to consumers who could not afford to pay Prehired’s tuition, and/or (2) demanding and collecting payments on such loans.

12.

Plaintiffs file this enforcement action to prevent and remedy Defendants’ unfair and deceptive business practices and vindicate the public interest. 13.

The CFPA, which prohibits “unfair, deceptive, or abusive acts or practices,” explicitly delegates to state attorneys general the authority to bring Federal civil enforcement actions in order to enforce the Act and to secure remedies provided therein. 12 U.S.C. § 5552(a)(1). This provision is subject to a requirement that an attorney general provide prior notice to the Consumer Financial Protection Bureau (CFPB). Plaintiff State of Washington has provided such notice.

JURISDICTION AND VENUE 14.

This adversary proceeding relates to the Defendants’ respective Chapter 7 bankruptcy cases, jointly administered under Case No. 22-11007, pending in the United States Bankruptcy Court for the District of Delaware.

15.

This adversary proceeding is brought pursuant to Rule 7001 of the Federal Rules of Civil Procedure.

16.

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This adversary proceeding is a not a core proceeding but is otherwise related to a case under title 11. 28 U.S.C. § 157(c).

17.

Venue is proper in this district pursuant to 28 U.S.C. § 1409. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 4 of 34

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ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

18.

Plaintiffs consent to entry of a final order by the Court in connection with this adversary proceeding to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution.

PLAINTIFFS 19.

Plaintiff Washington is the State of Washington, through Attorney General Robert W. Ferguson, with offices located at 800 Fifth Avenue, Suite 2000, Seattle, WA 98104. 20.

Plaintiff Oregon, is the State of Oregon by and through Attorney General Ellen Rosenblum.

21.

Plaintiff DFPI is a California state agency and is the state’s banking, securities, and consumer financial protection regulator. Pursuant to 12 U.S.C. § 5552(a)(1), the DFPI is a “state regulator” authorized to bring a civil action to enforce the CFPA against entities authorized to do business in the state.

22.

Plaintiff Delaware is the State of Delaware, by Attorney General Kathleen Jennings.

23.

Keith Ellison is the Attorney General of Minnesota and brings this action on behalf of Minnesota and its residents to enforce Minnesota and federal law, vindicate sovereign and quasi-sovereign interests, and remediate harm arising out of violations of those laws. He is authorized to do so by the Minnesota Constitution, parens patriae powers, Minn. Stat. ch. 8, and 12 U.S.C. § 5552.

24.

Plaintiff Illinois is the People of the State of Illinois, through Kwame Raoul, Illinois Attorney General.

25.

The Plaintiff State of South Carolina brings this action by and through its Attorney General, Alan Wilson, in its sovereign capacity in order to protect the interests of the State of South Carolina and its citizens. The Attorney General brings this action pursuant to his parens patriae, constitutional, statutory, and common law authority. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 5 of 34

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ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

26.

Plaintiff North Carolina is the State of North Carolina, through Attorney General Joshua H. Stein, with offices located at 114 W. Edenton Street, Raleigh, NC 27603. 27.

Plaintiff Massachusetts is the Commonwealth of Massachusetts by and through Attorney General Andrea Joy Campbell.

28.

Plaintiff Virginia is the Commonwealth of Virginia, through Attorney General Jason S. Miyares, with offices located at 202 North Ninth Street, Richmond, Virginia, 23219. 29.

Plaintiff Wisconsin is the State of Wisconsin, through Attorney General Joshua L. Kaul and the Wisconsin Department of Justice, and has its principal offices at the State Capitol in Madison, Wisconsin. The address of the Wisconsin Department of Justice is 17 West Main Street, P.O. Box 7857, Madison, Wisconsin, 53707. 30.

The Bureau is an independent agency of the United States charged with regulating the offering and provision of consumer financial products and services under Federal consumer financial laws. 12 U.S.C. § 5491(a). The Bureau has independent litigating authority to enforce Federal consumer financial laws, including the CFPA and the FDCPA. 12 U.S.C. §§ 5564(a)-(b); 5481(12), (14); 15 U.S.C. § 1692l(b)(6).

DEFENDANTS 31.

Defendant Prehired is a Delaware limited liability company with its principal place of business located at 8 The Green, Suite 10588 Dover, DE 19901. Prehired has transacted business in this District and throughout the United States. 32.

Prehired has offered or provided a "consumer financial product or service" as defined in 12 U.S.C. §§ 5481(5), (15)(A)(i)&(x).

33.

Defendant Prehired Recruiting is a Delaware limited liability company with its principal place of business located at 4900 O’Hear Avenue, Suite 100, North Charleston, SC 29405.

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34.

Defendant Prehired Accelerator is a Florida limited liability company with its principal place of business located at 7901 4th St. N., Suite 300, Saint Petersburg, FL 33702. 35.

Prehired Recruiting and Prehired Accelerator were both created by the sole member and owner of Prehired, Joshua Jordan (Jordan), to hold defaulted ISAs originated by Prehired and to pursue collection activities on them. 36.

Prehired Recruiting and Prehired Accelerator’s activities included, without limitation, acquiring defaulted ISAs originated by Prehired, contacting consumers throughout the United States, demanding and obtaining payments, and soliciting and/or entering into settlement agreements relating to such ISAs and, therefore, they offered or provided a "consumer financial product or service" as defined in 12 U.S.C. §§ 5481(5), (15)(A)(x).

FACTUAL ALLEGATIONS A.

Prehired Offers Vocational Training for Software Sales Representatives 37.

Prehired operated a 12-week online training program in which it offered to train consumers in Washington, and around the country, to prepare them for entry-level positions as software sales development representatives, or “SDRs.” 38.

SDRs are responsible for locating, researching, and contacting potential clients for the products or services sold by the company for which they work. An SDR’s primary objective is to schedule a meeting between a prospective customer and an account executive for a software demonstration.

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39.

Many SDR positions require little or no prior sales experience or training. 40.

Prehired’s program (the “Program”) primarily consisted of its online course content and access to mentoring support, all with the goal to help enrolled consumers obtain a job in software sales, even if they have no prior experience. 41.

As of May 2018, Prehired’s Program included (1) approximately 15 hours of video, recorded by Defendants’ founder and owner, and made available to students via the internet; (2) approximately 30 “scripts, templates and checklists;” (3) access to Prehired’s group on the social media platform LinkedIn; and (4) access to mentoring by its staff, including via phone, email, and online chat.

42.

Prehired’s Program was a postsecondary education program, consisting of courses, training, instruction or study, offered to consumers on a fee basis, for the purpose of instructing, training, or preparing consumers for the profession of software sales representative. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 8 of 34

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43.

Agreements between Prehired and its students describe Prehired’s program as “higher education or training.”

44.

Prehired solicited and encouraged consumers nationwide to enroll in its Program.

B. Prehired Enticed Most Students Into Predatory Student Loans in the Form of ISAs 45.

In its advertising, Prehired claimed its program fits consumer’s schedules, even if they already have “a house full of kids, or other commitments.” Prehired specifically targeted “underrepresented groups” and military veterans with its advertising. 46.

The price of Prehired’s full program varied over time, from approximately $2,500 in 2018, to $15,000 in 2019 and 2020.

47.

In or about April 2020, Prehired increased its listed upfront cost to $30,000. 48.

On information and belief, Prehired’s tuition price increase was implemented primarily to aid Prehired in its collection efforts and to avoid regulations and potential legal liability. The increase was not in connection or in proportion with any increase in the value of Prehired’s services to consumers.

49.

Neither $15,000 nor $30,000 was commensurate to the actual value of the services Prehired provided to consumers, which was considerably less than $15,000. 50.

As of 2020, Prehired’s cost for providing its program was not greater than $8,000 for each consumer.

51.

As of July 2019, Prehired encouraged consumers who could not afford to pay cash to finance their training program via an ISA. 52.

ISAs are a form of consumer credit under which borrowers repay the loan obligation in regular installments over a period of time. Under a typical ISA, in exchange for money up front, borrowers agree that once their income exceeds an income threshold, they will make payments based on a percentage of their income until either: (i) they meet a payment cap or (ii) a period of years elapses.

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53.

Depending on the year offered, Prehired’s ISAs required consumers to make minimum payments equal to between 12.5% and 16% of their gross income for 4 to 8 years or until they paid a total of $30,000, whichever came first. 54.

ISAs are often marketed as an alternative to conventional private student loans. 55.

Prehired offered and provided ISAs to consumers to help pay for educational expenses. As of at least November 2020, Prehired’s website indicated that its ISA required consumers to pay 12.5% of their gross income for 48 months, up to a total of $30,000. 56.

Prehired’s form agreements state that an ISA “is not a loan, and does not create any debt;” that an ISA “is not credit or a loan;” and that an ISA “is different from a loan . . . .” 57.

Prehired’s form ISA agreements did not contain all the key facts about credit required under Regulation Z, 12 C.F.R. § 1026.18, including “[t]he amount financed, using that term,” 12 C.F.R. § 1026.18(b); “[t]he finance charge, using that term,” 12 C.F.R. § 1026.18(d); and “[t]he annual percentage rate, using that term,” 12 C.F.R. § 1026.18(e). 58.

At all relevant times, Prehired originated its ISAs, and was a party to its ISAs. 59.

Between January 1, 2018 and April 30, 2022, hundreds of consumers from Washington, and across the United States, enrolled in Prehired’s Program by entering into Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 10 of 34

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contracts with Prehired. Many of these consumers financed Prehired’s Program cost through Prehired’s ISAs.

60.

Prehired originated at least 1,038 ISAs.

61.

On the face of the ISAs, Prehired is the entity to whom the student’s obligation is payable.

62.

Prehired is therefore a “creditor” under TILA and Regulation Z. 15 U.S.C. § 1602(g); 12 C.F.R. § 1026.2(a)(17)(i).

63.

Prehired’s form contracts used in 2019 and early 2020 stated that its up-front tuition price was $15,000. In or about May 2020, Prehired increased its listed upfront price to $30,000.

64.

After Prehired increased its listed upfront price to $30,000, it continued to offer the ISAs for purchase to investors for $15,000 each. Therefore, the maximum up-front value of Prehired’s ISAs is no more than $15,000.

65.

This difference between the cost of Prehired’s program if financed through an ISA (up to $30,000) rather than paid in cash ($15,000)—is a finance charge. 66.

Prehired’s ISAs are, in fact, loans that create debt, as they grant students the right to purchase services and pay for those services later. C. Prehired Failed to Disclose Required Information 67.

Under TILA and Regulation Z, creditors must disclose certain key facts about closed-end credit, including the “amount financed,” the “finance charge,” and the “annual percentage rate,” using those terms. 15 U.S.C. § 1638(a)(2)-(4); 12 C.F.R. § 1026.18. 68.

Prehired’s ISAs are closed-end credit because they grant consumers the right to incur debt (to finance training) and defer its payment, and so are credit, and that credit is not open ended.

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69.

Prehired has not provided the disclosures required by TILA and Regulation Z, in connection with its ISAs, including the “amount financed,” the “finance charge,” and the “annual percentage rate.”

D. Defendants’ Marketing Practices 70.

Through various forms of advertising, Defendants misrepresented to consumers that completion of Prehired’s Program would lead to employment with compensation of $60,000-$80,000 in year one, and over $100,000 after one year on the job. 71.

Prehired began advertising its Program to the public by May 2018. At that time, Prehired represented to consumers that they could “Go from zero to your $100,000+ sales career in 40 hours,” and that “96% get hired.”

72.

Prehired’s pricing has varied over time. In May 2018, the cost of Prehired’s full Program was $2,497. At that time, Prehired also offered consumers the option to purchase only Modules 1 through 5, consisting of approximately 7 hours of online videos, for $697. 73.

In 2020, Prehired offered its online videos alone for $4,997 or in three payments of $1,997 each.

74.

As of at least July 2019, Prehired began indicating to consumers, including Washington consumers, that the cost of its full Program was $15,000. 75.

Despite the variable upfront listed price from $2,497 to $15,000, Prehired’s ISA contracts required students to repay Prehired up to $30,000. If a student obtained a $60,000 per year job, 48 payments at 12.5% would also equal $30,000. The least amount a student would pay was $20,000, if they only obtained job at $40,000 per year. 76.

Prehired advertised that its ISAs had no interest, but Prehired’s repayment cap included a return of anywhere from 1200% (from the cost of $2,497 in 2018) to 100% (for the $15,000 listed cost in 2020).

77.

Additionally, Prehired consistently made extravagant claims about the earning potential for its members. In or about November 2018, Prehired’s website stated: “We will teach Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 12 of 34

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you how to get a $100,000+ sales career in six weeks,” and invited consumers to “Learn How to Get A Job At Companies Like: Amazon, Google, Slack, Outreach, Zillow,” among others. 78.

In or about May 2022, Prehired’s website contained the following prominent statements: “Your 6-Figure Sales Career Starts Here,” “After 12 weeks, Prehired members average $69,000 in their first year with 6-figure potential after that,” and “Start with zero upfront cost and a job guarantee.”

79.

As of May 2022, Prehired’s website also stated that (a) more than 90% of Prehired members are hired within 12 months; (b) the average first year income is $69,000 “with a six-figure potential for this career path”; and (c) the minimum offer is $60,000, described as a $40,000 plus base salary.

80.

In a video featured on Prehired’s website, Jordan stated that “people that we help in our program average $73,000 in their first year right out of our program.” He also stated that it takes only 12 to 13 weeks for Prehired’s students to receive a signed offer for that amount, even before they complete the program.

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E. Defendants’ Unfair and Deceptive Practices in Advertising and Originating ISAs 81.

As of at least November 2020, Prehired’s website stated: “Our members only start paying dues only2 AFTER they land a $60k+ job.” 82.

As of June 2021, Prehired’s website homepage stated: “After 12 weeks, Prehired members average $73,000 in their first year with 6-figure potential in their second year. Start for $0 down.”

83.

In addition to its claims about earning potential, since at least 2020, Prehired also offered consumers a job guarantee.

84.

As of January 2022, Prehired’s website homepage stated: “After 12 weeks, Prehired members average $69,000 in their first year with 6-figure potential after that. Start with zero upfront costs and a job guarantee.”

2 Sic.

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85.

On the same homepage, Prehired stated: “Backed by Our Job Guarantee … We guarantee you land a $60k job offer (from a tech company YOU choose) . . . Start For $0, Share the Risk … Pay nothing until you get a job . . . .” 86.

Together, these representations created an impression that a consumer would not need to make any payments toward Prehired’s Program unless and until they received a job offer from a tech company with compensation of at least $60,000 per year. 87.

This representation was misleading.

88.

The express terms of Prehired’s ISAs provided that payments are due when the borrower’s income meets or exceeds the Minimum Threshold (“Floor”) of $3,333.33 on a monthly gross pre-tax basis (the equivalent of $40,000 per year), and that monthly payments are $0 when the consumer’s monthly income is less than the Floor. This is $20,000 less than stated in the guarantee.

89.

Moreover, terms of Prehired’s template agreement allowed Prehired to invoke the payment obligation if the consumer makes as little as $30,000 per year. It further provided that “Members who do not complete the 12 month C[areer] S[earch] P[rocess] will have an Income Floor of $2,500/month (i.e. $30,000/year).” Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 15 of 34

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90.

In some cases, Prehired unilaterally adjusted the ISA Floor on consumer accounts in its ISA servicing system from $40,000 to $30,000 on the purported grounds that the borrower failed to accept a bona fide offer before the completion of their CSP. 91.

In addition, buried in the fine print in Prehired’s template agreement is a provision that states Prehired students must also “receive a bona fide offer,” in addition to completing “the 12-month CSP,” in order to have their Floor raised to $40,000. 92.

Prehired required its students to accept any “bona fide offer.” 93.

Under these terms, no consumer’s ISA Floor could ever have been set at $40,000 per year, because by Prehired’s own definition, any offer below $60,000 per year was not a “bona fide offer.” This created the untenable situation that a student making $40,000 per year was obligated to pay under the ISA, but Prehired’s job guarantee was inapplicable, making the guarantee illusory.

94.

Defendants have collected or attempted to collect payments from consumers who have not obtained the type of job offer Prehired advertised. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 16 of 34

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F. Prehired’s Deceptive ISA Payment Calculator 95.

As of at least August 2020, Prehired’s website contained an ISA payment calculator tool, which invited the user to “Estimate Your ISA Payment.” 96.

The tool displayed a horizontal line representing “Monthly Pre-Tax Earnings” between $1,000 and $10,000, with a pointer the user could toggle from side to side along the line. If the user set the pointer at the 1,000 mark along the line, the calculator displayed the following message: “You’ll Pay $0/mo.” If the user set the pointer at the 5,000 mark, the calculator displayed: “You’ll Pay $625 / mo for 48 months.” The following table represents select user input and corresponding output from the calculator tool: Monthly Pre-Tax Earnings:

You’ll Pay:

1,000 $0/mo 1,500 $0/mo 2,000 $0/mo 2,500 $0/mo 3,000 $0/mo 3,500 $438 / mo for 48 months Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 17 of 34

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4,000 $500 / mo for 48 months 4,500 $563 / mo for 48 months 5,000 $625 / mo for 48 months 8,000 $1000 / mo for 30 months 10,000 $1250 / mo for 24 months 97.

According to Prehired’s ISA payment calculator tool, consumers would pay $0 per month if they made $3,000 per month in pre-tax earnings, or $36,000 per year. 98.

This representation conflicted with at least some of Prehired’s consumer agreements, which in some circumstances required payments when the consumer makes as little as $30,000 per year gross.

99.

This representation also conflicted with Prehired’s regular practice of adjusting the ISA Floor in its servicing system from $40,000 to $30,000 on the purported grounds that the borrower failed to accept a bona fide offer. G. Prehired Has Manipulated Student Income Reporting To Trigger Repayment 100.

Prehired’s form ISA required consumers to report changes in income as they occur, and by April 30 of each year.

101.

Prehired agents have unilaterally increased the reported income on some borrowers’ accounts in the middle of the calendar year in a manner that triggered increased payment obligations, without the borrower’s knowledge. 102.

Prehired agents have notated such adjustments with substantially the following: “Member has not done one or more of the following: Updated their employment status; uploaded paystubs for the previous month; submitted bank statements (if necessary). Therefore Prehired is updating their income to match the average members OTE earnings which is $72k. It is on the member to update and show proof.”

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Defendants Engaged in Unfair and Deceptive in Seeking to Enforce Prehired ISAs 103.

At least some of Prehired’s form ISAs provided that claims arising out of the ISA, except claims cognizable by a small claims court, must be resolved by binding arbitration administered by the American Arbitration Association in accordance with its Consumer Arbitration Rules.

104.

In September 2021, Jordan created Prehired Accelerator as a Florida LLC. 105.

In December 2021, Jordan created Prehired Recruiting as a Delaware LLC.3 106.

Neither Prehired Recruiting nor Prehired Accelerator were subsidiaries of Prehired.

107.

The purpose of both entities, Prehired Recruiting and Prehired Accelerator, was to acquire and collect on defaulted ISAs originated by Prehired. 108.

Prehired transferred non-performing ISAs to Prehired Recruiting and Prehired Accelerator for the purpose of collecting on those obligations. 109.

Between at least December 30, 2021 and July 28, 2022, Prehired Recruiting and Prehired Accelerator contacted consumers nationwide, by phone and email, demanded payments, threatened to take legal action to enforce Prehired’s ISAs, and attempted to induce or induced consumers to sign settlement agreements. 110.

Between January 27, 2022 and February 16, 2022, Prehired Recruiting filed over 280 lawsuits in Delaware’s Justice of the Peace Court against consumers located throughout the United States who signed Prehired ISAs that it claimed were in default. Prehired Recruiting sought to collect $25,000 from each consumer, for a total of over $7.2 million. 111.

Most of Prehired’s ISA’s contained a New York choice of law clause while some contained a New York venue clause. None of these clauses were negotiable by the consumers.

3 Jordan had previously formed a company named Prehired Recruiting as a Florida LLC. In this Chapter 7 proceeding, Jordan testified that he intended to change the state of incorporation of Prehired Recruiting from Florida to Delaware, but inadvertently failed to wind down the Florida entity. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 19 of 34

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None of Prehired’s ISAs provided for venue in Delaware, meaning consumers could not have anticipated being sued in Delaware.

112.

Prehired Recruiting alleged that it “has been assigned” the consumers’ contracts with Prehired.

113.

The lawsuits were filed in Delaware’s Justice of the Peace Court by Jordan, acting as an agent for Prehired Recruiting pursuant to Delaware Supreme Court Rule 57, which allows non-lawyers to appear on behalf of corporate entities at the discretion of the Chief Magistrate.

114.

At the time of this transfer, at least some of the ISAs were placed by Prehired with another third-party debt collector (“Non-Party Debt Collector”), which was conducting collection activity with respect to these accounts.

115.

Before Prehired Recruiting filed its lawsuits, the Non-Party Debt Collector settled a debt with at least one consumer for less than $25,000, and was receiving payments pursuant to the settlement. At the time Prehired Recruiting filed suit, the remaining balance on the consumer’s account was $12,875. Despite this, Prehired Recruiting filed a lawsuit alleging the consumer owed $25,000.

116.

After Prehired Recruiting filed its lawsuits, each of which sought a total amount of $25,000, Prehired Recruiting contacted the defendant consumers with an offer to settle for a reduced amount “based on the percentage of your membership program you completed.” When the consumers responded, Prehired Recruiting represented to them that “Your ISA amount owed is $30,000, but we’d be willing to dismiss the lawsuit and settle for a total amount of $25,000 with monthly payments being $500.”

117.

On or about March 8, 2022, the Consumer Protection Unit of the Delaware Department of Justice (DE CPU) sent a letter to the Chief Magistrate, copying Jordan, requesting review of Jordan’s fitness to serve as a Rule 57 agent. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 20 of 34

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118.

On or about March 10, 2022, Prehired Recruiting entered into a contract with online arbitration provider Ejudicate, Inc. (d/b/a Ejudicate.com). 119.

On or about March 14, 2022, the Delaware Justice of the Peace Court began staying each of the cases filed by Jordan on behalf of Prehired Recruiting pending a consolidated hearing on jurisdiction.

120.

In or about March 2022, Prehired unilaterally amended the online version of its terms and conditions at prehired.app/pages/terms to provide for arbitration of its claims arising out of its ISAs via Ejudicate.com.

121.

As of June 2021, Prehired’s online version of its Program Terms of Service, available at prehired.app/pages/terms, made no reference to Ejudicate.com. 122.

None of the consumers who had executed agreements with Prehired prior to March 2022, legally consented to arbitration of claims relating to Prehired via Ejudicate.com. 123.

As of April 11, 2022, Prehired’s online version of its Program Terms of Service, available at prehired.app/pages/terms, contained language stating that any dispute, claim or controversy arising out of Prehired’s terms, MSAs or ISAs “shall be settled by arbitration administered by Ejudicate, Inc. . . .” The text went on to state, “You consent to electronic service of process, with service to be made to your email address used in the electronic signing of the ISA, MSA, or this Site. . . . Notwithstanding the foregoing, if a Claim that Prehired wishes to assert against you is cognizable in a small claims court (or an equivalent court), Prehired may pursue such Claim in that small claims court; however, if the Claim is transferred, removed, or appealed to a different court, it shall be resolved by arbitration administrated by Ejudicate.” 124.

On or about March 31, 2022, Prehired Recruiting voluntarily dismissed substantially all of the lawsuits it filed against consumers in the Delaware Justice of the Peace Court.

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125.

On or about April 4, 2022, Prehired Recruiting began filing arbitration claims against consumers on Ejudicate.com, including over 60 of the same claims Prehired Recruiting previously filed and dismissed in Delaware.

126.

On or about May 18, 2022, DE CPU demanded Prehired Recruiting and its affiliates cease and desist filing arbitration claims. 127.

In or about May 2022, Prehired, Prehired Recruiting and/or Prehired Accelerator began contacting consumers who signed Prehired’s ISAs, and asking them to sign a settlement agreement. Defendants deceptively described these “settlement agreements” as beneficial to the consumer. In fact, Defendants intended these agreements to avoid defenses otherwise available to the consumers under the Prehired ISAs, and to impose more onerous dispute resolution, repayment, and collection terms.

128.

Defendants’ settlement agreements purport to release the consumers’ claims against Prehired, Prehired Recruiting and Prehired Accelerator, as well as their “directors, managers, owners, officers, members, principals, agents, employees, representatives and independent contractors,” and convert the consumer’s ISA into an agreement to make recurring monthly payments to Defendants for several years.

CLAIMS FOR RELIEF FIRST CAUSE OF ACTION (VIOLATIONS OF THE CFPA:

Deception Relating to Nature of ISAs as Loans) (By All Plaintiffs Against Prehired) 129.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

130.

Section 1036(a)(1)(B) of the CFPA prohibits covered persons from engaging in “any unfair, deceptive, or abusive act or practice.” 12 U.S.C. § 5536(a)(1)(B). Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 22 of 34

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131.

A representation is deceptive under the CFPA if it misleads or is likely to mislead consumers acting reasonably under the circumstances and the representation is material. 132.

Prehired entered into ISAs with consumers in Washington and nationwide. 133.

Prehired’s ISAs are credit because they provide the right to defer payment of debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase. 12 U.S.C. § 5481(7).

134.

Prehired is a covered person under the CFPA because they offer credit for use by consumers primarily for personal, family, or household purposes. 12 U.S.C. § 5481(5), (6), (7), (15)(A)(i).

135.

As described above, while extending credit in the form of ISAs and other instruments to consumers to pay Prehired’s tuition, and/or demanding and collecting payments on such loans, Prehired represented to consumers that Prehired’s ISAs were not loans or credit and did not create debt.

136.

These representations misled or were likely to mislead consumers because they were untrue. The ISAs were loans, and did create debt. 137.

Prehired’s misrepresentations were material because they were likely to affect a consumer’s choice of a product.

138.

The above-described statements are likely to mislead a consumer acting reasonably under the circumstances.

139.

These representations were deceptive in violation of §§ 1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).

SECOND CAUSE OF ACTION (VIOLATIONS OF THE CFPA:

Deception Relating to ISA Terms) (By All Plaintiffs Against Prehired) 140.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

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141.

Section 1036(a)(1)(B) of the CFPA prohibits covered persons from engaging in “any unfair, deceptive, or abusive act or practice.” 12 U.S.C. § 5536(a)(1)(B). 142.

A representation is deceptive under the CFPA if it misleads or is likely to mislead consumers acting reasonably under the circumstances and the representation is material. 143.

Prehired entered into ISAs with consumers in Washington and nationwide. 144.

Prehired’s ISAs are credit because they provide the right to defer payment of debt or to incur debt and defer its payment. 12 C.F.R. § 5481(7). 145.

Prehired is a covered person under the CFPA because they offer credit for use by consumers primarily for personal, family, or household purposes. 12 U.S.C. § 5481(5), (6), (7), (15)(A)(i).

146.

As described above, while offering or providing consumer financial products or services, Prehired represented to consumers that no payments would be due under Prehired’s ISAs unless and until the consumer had a job making at least $60,000 per year. 147.

Prehired’s representations created the net impression that a consumer would not be required to make any payment in connection with Prehired’s ISAs unless and until the consumer had a job making at least $60,000 per year. 148.

These representations misled or were likely to mislead consumers because they were untrue. The terms of Prehired’s ISAs required many consumers to make payments when they were making as little as $30,000 per year, and Defendants regularly caused their servicing system to trigger a payment obligation for consumers who were making as little as $30,000 per year, or were not working at all.

149.

Prehired’s misrepresentations were material because they were likely to affect a consumer’s choice of a product.

150.

The above-described statements are likely to mislead a consumer acting reasonably under the circumstances.

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151.

These representations were deceptive in violation of §§ 1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).

THIRD CAUSE OF ACTION (VIOLATIONS OF TILA:

Failure to Provide Disclosures Required by TILA and Regulation Z) (By the Bureau Against Prehired) 152.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

153.

TILA and Regulation Z require creditors to disclose certain key facts about closedend credit, including the “amount financed,” “finance charge,” and “annual percentage rate,” using those terms. 15 U.S.C. § 1638(a)(2), (3), (4); 12 C.F.R. § 1026.18(b), (d), (e). 154.

Prehired’s ISAs are credit under Regulation Z because they provide the right to defer payment of debt or to incur debt and defer its payment. 12 C.F.R. § 1026.2(a)(14). The ISAs are closed-end credit because they are consumer credit that is not open ended. 155.

Prehired is a creditor within the meaning of TILA and Regulation Z because, from 2019 through 2022, it regularly extended credit in the form of originating at least 1,038 ISAs, the ISAs were subject to a finance charge, and the ISAs were payable to Prehired. 12 C.F.R. § 1026.2(a)(17).

156.

TILA and Regulation Z require creditors to disclose certain key facts about credit, including: “The amount financed, using that term,” 12 C.F.R. § 1026.18(b); “[t]he finance charge, using that term,” 12 C.F.R. § 1026.18(d); and “[t]he annual percentage rate, using that term,” 12 C.F.R. § 1026.18(e).

157.

Between at least July 2019 through 2022, Prehired did not provide consumers the disclosures required under TILA and Regulation Z. Prehired, therefore, violated TILA and Regulation Z. 15 U.S.C. § 1638(a)(2), (3), (4); 12 C.F.R. § 1026.18(b), (d), (e).

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FOURTH CAUSE OF ACTION (VIOLATIONS OF THE CFPA BY VIOLATING TILA AND REGULATION Z

(By All Plaintiffs Against Prehired) 158.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

159.

Section 1036(a)(1)(A) of the CFPA prohibits covered persons from offering or providing consumer-financial products or services not in conformity with “Federal consumer financial law” or otherwise committing any act or omission in violation of a “Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A).

160.

TILA and Regulation Z are each a “Federal consumer financial law.” 12 U.S.C. § 5481(14) (defining “Federal consumer financial law” to include “enumerated consumer laws” and “any rule or order prescribed by the Bureau under this title”); 12 U.S.C. § 5481(12)(O), (14) (defining “enumerated consumer law” to include TILA). 161.

Prehired offered ISAs in a manner that violated TILA and Regulation Z. 162.

By violating TILA and Regulation Z, Prehired violated the CFPA, 12 U.S.C. § 5536(a)(1)(A).

FIFTH CAUSE OF ACTION (VIOLATIONS OF THE CFPA: Unfair Distant Forum Collection Actions) (By All Plaintiffs Against Prehired Recruiting) 163.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

164.

Section 1036(a)(1)(B) of the CFPA prohibits covered persons from engaging in “any unfair, deceptive, or abusive act or practice.” 12 U.S.C. § 5536(a)(1)(B). 165.

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). Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 26 of 34

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166.

Prehired Recruiting’s principal purpose was to collect debts, in the form of ISAs that were originated by Prehired, and had subsequently defaulted. Prehired Recruiting is a “covered person” because it collected debt related to a consumer financial product or service. 12 U.S.C. §§ 5481(6), (15)(A)(x).

167.

In the course of collecting on such debts, in or about January and February 2022, Prehired Recruiting filed over 280 debt collection lawsuits in the Delaware Justice of the Peace Court in New Castle, Delaware, against consumers who (i) had signed contracts far away from New Castle, Delaware, and (ii) resided far away from Delaware when the lawsuits were commenced.

168.

Many consumers were unaware that an action could be commenced against them in Delaware because Prehired’s ISAs did not provide for venue in Delaware and/or the consumers had little or no opportunity to review the portion of the contract that contained such a provision.

169.

To the extent a venue selection clause favoring Delaware existed in Prehired’s contracts, and the consumers were aware of, read and understood the venue-selection clause, there was no opportunity to bargain for its removal because the clause was non-negotiable. 170.

The practice of filing debt-collection lawsuits in a distant forum when the consumer does not live in that forum and was not physically present in that forum when the contract was executed has caused or is likely to cause substantial injury that is not reasonably avoidable by consumers and is not outweighed by any countervailing benefit. 171.

Prehired Recruiting’s practice of filing debt collection lawsuits in a distant forum when the consumers did not live in that forum and were not physically present in that forum when they executed the financing contract is unfair. Because Prehired Recruiting is a “covered person,” its conduct is unlawful under sections 1031 and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§5531, 5536(a)(1)(B).

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SIXTH CAUSE OF ACTION (VIOLATIONS OF THE CFPA:

Deceptive Inducement to Enter into Settlement Agreements) (By All Plaintiffs Against Prehired Recruiting and Prehired Accelerator) 172.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

173.

Section 1036(a)(1)(B) of the CFPA prohibits covered persons from engaging in “any unfair, deceptive, or abusive act or practice.” 12 U.S.C. § 5536(a)(1)(B). 174.

A representation is deceptive under the CFPA if it misleads or is likely to mislead consumers acting reasonably under the circumstances and the representation is material. 175.

The principal purpose of Prehired Recruiting and Prehired Accelerator was to collect debts, in the form of ISAs that were originated by Prehired, and had subsequently defaulted.

176.

Prehired Recruiting and Prehired Accelerator are “covered persons” because they collected debt related to a consumer financial product or service. 12 U.S.C. §§ 5481(6), (15)(A)(x).

177.

Prehired Recruiting and Prehired Accelerator engaged in deceptive acts or practices in attempting to collect on Prehired ISA debt by inducing consumers to convert the Prehired ISA into an agreement to make recurring monthly payments for several years. Defendants deceptively described these “settlement agreements” as beneficial to the consumer without disclosing that the true purpose of the settlement agreements was to avoid consumers’ defenses to the original Prehired ISAs, and impose more onerous dispute resolution and collection terms.

178.

Defendants’ representations created the net impression that the settlement agreements would benefit the consumer.

179.

Defendants’ representations were likely to mislead a consumer acting reasonably under the circumstances.

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180.

Defendants’ representations misled or were likely to mislead consumers because they were untrue. Defendants’ settlement agreements were designed to avoid consumers’ defenses to the original Prehired ISAs, and contained more onerous dispute resolution and collection terms.

181.

Defendants’ misrepresentations were material because they were likely to affect a consumer’s choice with respect to entry into the settlement agreement and remittance of payments that were not due under the original ISA. 182.

Prehired Recruiting and Prehired Accelerator’s use of this practice to collect ISA debts was an unlawful means used to collect or attempt to collect debts under sections 1031 and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§5531, 5536(a)(1)(B). SEVENTH CAUSE OF ACTION (VIOLATIONS OF THE FDCPA:

Deceptive, Unfair or Unconscionable Means to Collect or Attempt to Collect on a Debt) (By all Plaintiffs Against Prehired Recruiting and Prehired Accelerator) 183.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

184.

Defendants Prehired Recruiting and Prehired Accelerator have been persons who have used an instrumentality of interstate commerce or the mails in a business the principal purpose of which is the collection of debts, or who regularly collect or attempt to collect, directly or indirectly, debts owed or due or asserted to be owed or due another, and, are “debt collectors” under the FDCPA within the meaning of 15 U.S.C. § 1692a(6). 185.

In numerous instances, in connection with the collection of debts, Prehired Recruiting and/or Prehired Accelerator, directly or indirectly, expressly or by implication, have used false, deceptive, or misleading representations or means, in violation of Section 807 of the FDCPA, 15 U.S.C. § 1692e, including, but not limited to: Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 29 of 34

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a. Falsely representing the amount of debt owed by consumers by stating that Prehired could collect more than the consumer legally owed, in violation of Section 807(2)(A) of the FDCPA, 15 U.S.C. § 1692e(2)(A); and b. Using false representations or deceptive means to collect or attempt to collect a debt by requesting consumers to sign settlement agreements deceptively described as beneficial to consumers when Defendants designed those agreements to avoid defenses otherwise available to the consumers under the Prehired ISAs, and to impose more onerous dispute resolution, repayment, and collection terms in violation of Section 807(10) of the FDCPA, 15 U.S.C. § 1692e(10).

186.

Defendants, therefore, violated § 807 of the FDCPA, 15 U.S.C. §§ 1692e. EIGHTH CAUSE OF ACTION (VIOLATIONS OF THE CFPA BY VIOLATING THE FDCPA: (By All Plaintiffs Against Prehired Recruiting and Prehired Accelerator) 187.

Plaintiffs re-allege and incorporate by reference the allegations contained in the preceding paragraphs of this Complaint.

188.

189.

The FDCPA is a “Federal consumer financial law.” 12 U.S.C. § 5481(14) (defining “Federal consumer financial law” to include “enumerated consumer laws” and “any rule or order prescribed by the Bureau under this title”); 12 U.S.C. § 5481(12)(H), (14) (defining “enumerated consumer law” to include FDCPA).

190.

Prehired Recruiting and Prehired Accelerator collected and/or attempted to collect debt in a manner that violated the FDCPA. Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 30 of 34

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191.

By violating the FDCPA, Prehired Recruiting and Prehired Accelerator violated the CFPA, 12 U.S.C. § 5536(a)(1)(A).

REQUEST FOR RELIEF

Plaintiff requests the following relief:

A declaration that Defendants’ conduct as described herein above is in violation of the CFPA and that ISAs Prehired originated were void ab initio as they were procured by misrepresentation;

An injunction permanently enjoining Defendants and all other persons acting on their behalf, directly or indirectly, from violating the CFPA, or any other provision of Federal consumer financial law, as defined by 12 U.S.C. § 5481(14), and any amendments thereto; 3.

An order directing Defendants to make full restitution to all borrowers who have suffered losses as a result of the acts and practices alleged in this complaint and any other acts or practices proved by the Plaintiffs, or in the alternative, enter an order allowing an unsecured creditor claim on behalf of the Plaintiffs for the full restitution amount; 4.

An injunction permanently enjoining Defendants from selling, assigning, transferring, conveying, collecting or causing to be collected (including but not limited to through litigation or judgments) any portion of a loan, including ISAs that resulted from the acts and practices alleged in this complaint and any other acts or practices proved by the Plaintiff;

An order directing Defendants to disgorge and forfeit all money it has derived as a result of the conduct alleged herein, or in the alternative, enter an order allowing an unsecured creditor claim on behalf of the Plaintiffs for any disgorgement amount 6.

An order directing Defendants to pay to Plaintiffs appropriate civil penalties pursuant to the CFPA, or in the alternative, enter an order allowing a unsecured creditor claim for appropriate civil penalties;

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An order directing the rescission or reformation of contracts where necessary to redress injury to borrowers;

An order directing Defendants to pay the Plaintiffs’ investigative and litigation costs in this matter, or the alternative, enter an order allowing an unsecured creditor claim for Plaintiffs’ investigative and litigation costs in this matter; and 9.

Any other relief the Court determines is just and proper.

DATED this 13th day of July, 2023.

ROBERT W. FERGUSON

Attorney General

s/Tad Robinson O’Neill

TAD ROBINSON O’NEILL

JULIA K. DOYLE

SUSANA CROKE

MADELINE DAVIS

Assistant Attorneys General

800 Fifth Avenue, Suite 2000

Seattle, WA 98104 (206) 254-0570 [email protected] [email protected] [email protected] [email protected] Attorneys for Plaintiff State of Washington

ELLEN F. ROSENBLUM #753239 Attorney General /s/ Marc Hull MARC HULL #990621 Senior Assistant Attorney General Department of Justice 1162 Court Street NE Salem, OR 97301-4096 Telephone: (503) 934-4400 Facsimile: (503) 373-7067 [email protected] Attorneys for State of Oregon /s/ Taylor Steinbacher TAYLOR STEINBACHER, Senior Counsel MELISSA ACEVEDO, Counsel 320 West 4th Street, Suite 750 Los Angeles, CA 90013 Attorneys for Plaintiff California Department of Financial Protection and Innovation

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ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

KATHLEEN JENNINGS Attorney General

/s/ Marion M. Quirk MARION M. QUIRK (#4136) Deputy Attorney General Delaware Department of Justice 820 N. French St., Floor 5 Wilmington, DE 19801 (302) 683-8810 [email protected] Attorneys for the State of Delaware

/s/ Adam Welle ADAM WELLE Assistant Attorney General Minnesota State Bar No. 0389951 (admitted per LR 9010-1(e)) Telephone: (651) 757-1425 Facsimile: (651) 296-7438 [email protected] Attorney for the State of Minnesota

/s/ Michele Casey MICHELE CASEY Assistant Attorney General Office of the Illinois Attorney General 100 W. Randolph Street, 12th Floor Chicago, Illinois 60601 Telephone: (773) 590-7925 Facsimile: (312) 814-2593 [email protected] Attorney for the State of Illinois

/s/ Jared Q. Libet JARED Q. LIBET Assistant Deputy Attorney General CLARK KIRKLAND Assistant Attorney General Office of the South Carolina Attorney General P.O. Box 11549 Columbia, SC 29211 Attorneys for the State of South Carolina JOSHUA H. STEIN Attorney General of North Carolina

/s/ Danielle Wilburn Allen DANIELLE WILBURN ALLEN Assistant Attorney General North Carolina State Bar No. 58141 North Carolina Department of Justice Post Office Box 629 Raleigh, North Carolina 27602 Telephone: (919) 716-6975 Facsimile: (919) 716-6050 [email protected] Attorneys for the State of North Carolina

ANDREA JOY CAMPBELL Massachusetts Attorney General

/s/ Diana Hooley DIANA HOOLEY, MA BBO No. 685418 LILIA V. DUBOIS, MA BBO No. 688848 Assistant Attorneys General Insurance and Financial Services Division Office of the Attorney General One Ashburton Place, 18th Floor Boston, MA 02108 (617) 963-2198 (Hooley) (617) 963-2239 (DuBois) [email protected] [email protected] Attorneys for the Commonwealth of Massachusetts

JASON S. MIYARES Attorney General of Virginia

/s/ Jonathan M. Harrison II JONATHAN M. HARRISON II Assistant Attorney General DAVID B. IRVIN JOSHUA L. KAUL Attorney General of Wisconsin

/s/ Colin R. Stroud COLIN R. STROUD Assistant Attorney General Wisconsin State Bar #: 1119457 Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 33 of 34

Page 35

ADVERSARY PROCEEDING COMPLAINT - 34

ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 (206) 464-7744

Senior Assistant Attorney General Office of the Attorney General of Virginia 202 North Ninth Street Richmond, VA 23219 Telephone: (804) 786-6557 Facsimile: (804) 786-0122 [email protected] [email protected] Attorneys for the Commonwealth of Virginia

Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Telephone: (608) 261-9224 Facsimile: (608) 294-2907 [email protected] Attorneys for Plaintiff State of Wisconsin ERIC HALPERIN Enforcement Director CARA PETERSEN Principal Deputy Enforcement Director ALUSHEYI J. WHEELER Deputy Enforcement Director OWEN MARTIKAN Assistant Litigation Deputy

/s/ Stefanie Isser Goldblatt STEFANIE ISSER GOLDBLATT JIM SAVAGE Enforcement Attorneys Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Telephone: (202) 573-4390 Facsimile: (703) 642-4585 [email protected] Attorneys for the Bureau of Consumer Financial Protection

Case 23-50438-JTD Doc 1 Filed 07/13/23 Page 34 of 34

Stipulation (Nov. 2023)

PDF of this document (19 pages)

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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

PREHIRED, LLC, et al, Debtors1.

Chapter 7

Case No. 22-11007 (JTD)

(Jointly Administered) STATE OF WASHINGTON; STATE OF OREGON; CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION;

STATE OF DELAWARE;

STATE OF MINNESOTA; STATE OF ILLINOIS; STATE OF SOUTH CAROLINA; STATE OF NORTH CAROLINA ex rel. Attorney General Joshua H. Stein.; COMMONWEALTH OF MASSACHUSETTS;

COMMONWEALTH OF VIRGINIA;

STATE OF WISCONSIN; and CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiff, v.

PREHIRED, LLC, a Delaware limited liability company;

PREHIRED RECRUITING, LLC, a Delaware limited liability company;

PREHIRED ACCELERATOR, LLC, a Florida limited liability company, Defendants.

Adv. Proc. No. 23-50438 (JTD)

RELATED D.I. 14

STIPULATED FINAL JUDGMENT AND ORDER AS TO DEBTORS PREHIRED, LLC, PREHIRED RECRUITING, LLC, AND PREHIRED ACCELERATOR, LLC

Plaintiffs State of Washington, State of Oregon, the California Department of Financial Protection and Innovation (“DFPI”), State of Delaware, State of Minnesota, State of Illinois,

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State of South Carolina, State of North Carolina, Commonwealth of Massachusetts, Commonwealth of Virginia, and State of Wisconsin (the “States”), and the Consumer Financial Protection Bureau (the “Bureau”) (collectively, the “Plaintiffs”) commenced this adversary proceeding on July 13, 2023 to obtain injunctive and monetary relief and civil penalties from debtors Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC (collectively, “Prehired Defendants”). The Complaint alleges violations of sections 1031(a) and 1036(a) of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C §5536(a)(1)(A) and (B); the Truth in Lending Act and its implementing Regulation Z (“TILA”), 15 U.S.C. § 1638(a)(2), (3), (4), 12 C.F.R. § 1026.18(b), (d), (e); and the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692e, in connection with Prehired Defendants’ unlawful practices in originating, servicing, collecting, and enforcing Income Sharing Agreements (“ISA”). The Plaintiffs and Prehired Defendants, through Don A. Beskrone, Chapter 7 Trustee (the “Trustee”) of the Prehired Defendants, agree to entry of this Stipulated Final Judgment and Order without adjudication of any issue of fact or law, to settle and resolve all matters in dispute arising from the conduct alleged in the Complaint.

The Plaintiffs and Trustee respectfully request that the Court enter this Stipulated Final Judgment and Order (“Order”).

FINDINGS 1.

On September 29, 2022, before the commencement of the instant adversary proceeding, Prehired Defendants filed a voluntary petition for relief under Subchapter 5 of Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., initiating a bankruptcy proceeding (the “Bankruptcy Proceeding”) in the United States Bankruptcy Court for Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 2 of 19

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the Southern District of New York, Case Nos. 22-111293-PB (Prehired, LLC), 22-11310-PB (Prehired Accelerator, LLC), 22-11311-PB (Prehired Recruiting, LLC). 2.

On October 26, 2022, upon motion from the State of Delaware, the Bankruptcy Court for the Southern District of New York transferred venue for all three cases to the Bankruptcy Court for the District of Delaware, Case Nos. 22-11007 (JTD), 22-11005 (JTD), 22- 11006 (JTD).

On November 4, 2022, the Court entered an order for joint administration of the three bankruptcy cases under Case No. 22-11007 (JTD), captioned, In re Prehired LLC, et. al. 4.

On November 22, 2022, the Court granted the Prehired Defendants’ motion to convert the proceedings to Chapter 7 after the bankruptcy estate became administratively insolvent. Don A. Beskrone was appointed as the Prehired Defendants’ Trustee on November 22, 2022.

The Trustee is not operating the business of the Prehired Defendants and is proceeding with an orderly liquidation under Chapter 7. 6.

The Plaintiffs and the Trustee agree to entry of this Order, without adjudication of any issue of fact or law, to settle and resolve all matters in this dispute arising from the conduct of Prehired Defendants alleged in the Complaint through the date this Order is entered. 7.

The automatic stay of the Bankruptcy Code does not stay the affirmative relief sought in this adversary proceeding against the Prehired Defendants because the action falls within the police and regulatory power exception to the automatic stay set forth in 11 U.S.C. §362(b)(4).

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The Court has authorized the Trustee to enter into this Order by an order dated November 2, 2023, (the “Settlement Order”) a copy of which is attached hereto as Exhibit A. The Bankruptcy Court’s Settlement Order is now final and no longer subject to appeal. 9.

The Trustee is an independent fiduciary for the Prehired Defendants and the bankruptcy Estates, having been appointed by the Office of the United States Trustee and approved by the Court. The Bureau and States make no allegations against the Trustee, but only the Prehired Defendants.

10.

The Trustee enters this stipulation to resolve the claims against the Prehired Defendants.

11.

The Trustee neither admits nor denies the allegations in the Complaint, except as specified in this Order. For the purposes of this Order, the Trustee admits the facts necessary to establish the Court’s jurisdiction over the Prehired Defendants and the subject matter of this action.

12.

This adversary proceeding is not a core proceeding but is otherwise related to a case under title 11. 28 U.S.C. § 157(c); 28 U.S.C. § 1334. 13.

Venue is proper in this district pursuant to 28 U.S.C. §1409. 14.

The Complaint states claims upon which relief may be granted under section 1031(a) and section 1036(a) of the CFPA, 12 U.S.C §§5531(a)(1)(A), (B), 5536(a), 5565, TILA, 15 U.S.C. § 1638(a)(2), (3), (4) and 12 C.F.R. § 1026.18(b), (d), (e), and the FDCPA, 15 U.S.C. § 1692e, and the Prehired Defendants are “covered persons” under the CFPA. The Prehired Defendants are creditors within the meaning of TILA and Regulation Z 12 C.F.R. §§ 1026.2(a)(17). Prehired Recruiting and Prehired Accelerator are “debt collectors” under the FDCPA within the meaning of 15 U.S.C. § 1692a(6). Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 4 of 19

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15.

During the Relevant Period, Prehired LLC offered or provided Consumer Financial Products or Services, 12 U.S.C. § 5481(5), (6), (7), and (15)(A)(i), and credit, 12 C.F.R. §§ 1026.2(a)(17) and 1026.2(a)(14). During the Relevant Period, Prehired Recruiting LLC and Prehired Accelerator, LLC, collected debts related to a Consumer Financial Product or Service. 12 U.S.C. § 5481(6) and (15)(A)(x).

16.

Prehired, LLC purported to offer Vocational Education Services (as defined below) to consumers. Prehired, LLC encouraged consumers to finance the cost of those services through ISAs.

17.

Prehired, LLC made deceptive representations about the ISAs, including that the ISAs were not credit and representing that repayment was contingent on the income of the student.

18.

In order to collect debts related to a Consumer Financial Product or Service, Prehired Recruiting, LLC and Prehired Accelerator, LLC falsely represented the amount of debt owed by consumers, and made material misrepresentations to consumers by describing “settlement agreements” as beneficial to consumers without disclosing the true purpose of these agreements was to avoid the consumer’s defenses to the original Prehired, LLC ISAs, and to impose more onerous dispute resolution and collection terms. 19.

Prehired Recruiting, LLC engaged in unfair debt collection practices by seeking to collect debt in a distant forum when the consumers did not live in that forum and were not physically present in that forum when the ISAs were executed. 20.

Through the violations alleged in the Complaint, the Prehired Defendants caused harm to consumers in the amount of consumers’ payments, and 6% prejudgment interest on those payments, made to Prehired, LLC for educational services. Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 5 of 19

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21.

The Court finds that the acts and practices described in the Complaint are unfair, deceptive, or otherwise unlawful practices and violated 12 U.S.C. §§ 5531(a), (c) and 5536(a)(1)(A), (B), TILA, 15 U.S.C. § 1638(a)(2), (3), (4) and 12 C.F.R. § 1026.18(b), (d), (e), and the FDCPA, 15 U.S.C. § 1692e.

22.

Based on the information maintained in Prehired, LLC’s records and the Declaration of Mr. Forbes, the Court finds that the acts and practices alleged in the Complaint have resulted in $3,775,858.63 plus $472,390.67 in prejudgment interest at 6% in harm to Affected Consumers. To the extent that Affected Consumers made payments on a consumer financial product offered by Prehired, LLC not recorded in Prehired, LLC’s existing records, the Court finds that those Affected Consumers were harmed in the amount of those payments made to Prehired Defendants or an agent of the Prehired Defendants and 6% prejudgment interest, but those amounts are currently unknown.

23.

Section 1055 of the CFPA, 12 U.S.C. § 5565 empowers this Court to order, among other things, injunctive relief, monetary relief, and civil money penalties. 24.

The Bureau is entitled to an Order imposing permanent injunctive relief, monetary relief, and civil money penalties.

25.

Entry of this Order is in the public interest.

26.

Prehired Defendants waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order and any claim they 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 agrees to bear its own costs and expenses, including, without limitation, attorneys’ fees.

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27.

Given that the Prehired Defendants are being liquidated under the Bankruptcy Code and are no longer doing business, and the Trustee has agreed not to seek permission to operate Prehired Defendants’ businesses, the Plaintiffs have agreed not to seek certain compliance and reporting requirements.

28.

The parties consent to entry of a final order by the Court in this proceeding. DEFINITIONS The following definitions apply to this order: 29.

The following definitions apply to this order: a. “Affected Consumers” includes any consumer who made payments to any person in connection with any Vocational Education Service offered by Prehired, LLC, under a consumer financial product or service, including, without limitation an income share agreement, used to finance the tuition, fee, or purchase price of such service from May 1, 2019 to March 31, 2023.

b. “Assist[ing] Others” includes, but is not limited to: i. Consulting in any form whatsoever;

ii. Providing administrative support services; iii. Performing customer service functions, including but not limited to, receiving or responding to consumer complaints; iv. Formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including but not limited to, any telephone sales scripts, direct mail solicitation, or the text of any Internet website, email or other electronic communication or advertisement; Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 7 of 19

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v. Formulating or providing, or arranging for the formulation of provision of, any marketing support material or service, including but not limited to, web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services or media placement services;

vi. Providing names of, or assisting in generation of, potential customers; vii. Performing marketing, billing, or payment services of any kind, viii. Acting or serving as an owner or principal of any entity. c. “Bureau” means the Consumer Financial Protection Bureau. d. “Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in the CFPA, 12 U.S.C. § 5481(5). e. “Effective Date” means the Date on which this Order is entered by the Court. f. “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Bureau or their delegate. g. “Estates” means the bankruptcy estates created within the instant Bankruptcy Proceeding pursuant to 11 U.S.C. §541.

h. “ISA” means an Income Share Agreement or Income Sharing Agreement, or any other form of consumer credit under which borrowers repay the underlying obligation in installments over a period of time and which provide for payments based on a percentage of the borrower’s income. i. “Person” means any individual, partnership, limited liability partnership, company, limited liability company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity. Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 8 of 19

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j. “Plaintiffs” means, collectively, the State of Washington, State of Oregon, the California Department of Financial Protection and Innovation, State of Delaware, State of Minnesota, State of Illinois, State of South Carolina, State of North Carolina, Commonwealth of Massachusetts, Commonwealth of Virginia, State of Wisconsin, and the Consumer Financial Protection Bureau. k. “Prehired Defendants” means Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC, and their successors and assigns. l. “Related Consumer Action” means a private action brought by or on behalf of one or more consumers or an enforcement action brought by another governmental agency against the Estates based on substantially the same facts as described in the Complaint.

m. “Relevant Period” means May 1, 2019, to March 31, 2023. n. “States” means State of Washington, State of Oregon, the California Department of Financial Protection and Innovation, State of Delaware, State of Minnesota, State of Illinois, State of South Carolina, State of North Carolina, Commonwealth of Massachusetts, Commonwealth of Virginia, and State of Wisconsin. o. “Trustee” means Don A. Beskrone, solely in his capacity as the Trustee appointed over the Prehired Defendants by the office of the United States Trustee, District of Delaware, and any successor trustee.

p. “Vocational Education Services” includes, but is not limited to any class, course, or program of training, instruction, or study, in any form or manner offered for the purpose of instructing, training, or preparing persons for any vocation or profession.

Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 9 of 19

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ORDER I.

Cessation of Business Activities IT IS ORDERED that:

30.

As of the Effective Date, each of the Prehired Defendants, whether acting directly, indirectly, or through any Person, and the Trustee, whether acting directly or through any Person, are permanently enjoined and restrained from operating, exercising control over, or taking action on behalf of, any of Prehired, LLC, Prehired Recruiting LLC, and Prehired Accelerator, LLC, and from participating in or Assisting Others in advertising, marketing, promotion, offering for sale, selling, or assisting in the sale of, or provision of any Consumer Financial Product or Services relating to Vocational Education Services including, but not limited to, offering, providing, servicing, or collecting debt relating to ISAs for Vocational Educational Services.

Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 10 of 19

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II.

Customer Information It is FURTHER ORDERED that:

31.

The Trustee, on behalf of and as a fiduciary for the respective Estates of the Prehired Defendants, may not: 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 that was obtained by the Prehired Defendants.

32.

However, and notwithstanding the foregoing, the Trustee may disclose or ue customer information if requested by a government agency or as required by law, regulation, or court order, including without limitation, as may be required by the Bankruptcy Court in the Bankruptcy Proceeding and/or the administration of the Estates. III.

Contract Cancellation IT IS FURTHER ORDERED that:

33.

Any ISA or other agreement Defendant Prehired LLC originated or sold to consumers to finance Vocational Education Services are declared void ab initio and any contract that is currently owned or held by the Estates shall be deemed rescinded without need of any further art by the Trustee, any consumer or customer, or otherwise, thereby releasing and discharging consumers and customers from any and all obligations under those agreements. Further, the Prehired Defendants and the Trustee are permanently restrained from any attempt to collect, sell, assign, or otherwise transfer any right to collect payment from any consumer related Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 11 of 19

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to any ISA or other agreement with Defendant Prehired, LLC to finance Vocational Educational Services.

IV.

Monetary Judgment IT IS FURTHER ORDERED that:

34.

A judgment for monetary harm, which includes actual pecuniary losses plus prejudgment interest, is entered in favor of the Plaintiffs and against the Prehired Defendants in the total amount of $3,775,858.63 plus 6% prejudgment interest, $472,390.67, for a total of $4,248,249.30 U.S. Dollars (the “Monetary Judgment”).

35.

The Monetary Judgment will be deemed to be an allowed general unsecured claim against each of the Estates, jointly and severally, in favor of the Bureau on behalf of all the Plaintiffs, subject to 11 U.S.C. §§ 507(a) and 726 governing priorities of expenses and claims in the Bankruptcy Proceeding.

36.

Any funds received by the Bureau in satisfaction of the Monetary Judgment shall be deposited into a fund or funds administered by the Bureau or its agent according to applicable statutes and regulations to be used for redress for Affected Customers, including, but not limited to, refund of moneys, restitution, damages or other monetary relief, and for any attendant expenses for the administration of such redress.

37.

If the Bureau determines, in its sole discretion, that providing redress to consumers is wholly or partially impracticable or if funds remain after the administration of redress is completed, the Bureau will deposit any remaining funds in the U.S. treasury. The Trustee will have no right to challenge the Bureau’s choice of remedies under this Section or, any right to contest the manner of distribution chosen by the Bureau. For the avoidance of Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 12 of 19

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doubt, the Trustee shall have no liability whatsoever, individually and/or in his capacity as Chapter 7 Trustee, under or in connection with this Order. V.

Order to Pay Civil Monetary Penalties IT IS FURTHER ORDERED that:

38.

Under section 1055(c) of the CFPA, 12 U.S.C § 5565(c), by reason of violations of the law alleged in the Complaint, and taking into account the factors in 12 U.S.C. §5565(c)(3), a civil monetary penalty in favor of the Bureau and against each Defendant is ordered in the amount of $1.00 (One U.S. Dollar), which shall be deemed an allowed general unsecured claim in the Bankruptcy Proceeding and against each of the Estates. 39.

The civil monetary penalty paid to the Bureau 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).

VI.

Additional Monetary Provisions IT IS FURTHER ORDERED that:

40.

Subject to 11 U.S.C §§ 507(a) and 726 governing priorities of expenses and claims in the Bankruptcy Proceeding, the Trustee must relinquish all dominion, control, and title to the funds paid to the Bureau on account of its claims to the fullest extent permitted by law and no part of the funds may be returned to the Estates.

41.

Within 30 days of the entry of a final judgment, order, or settlement in a Related Consumer Action, to the extent that such a Related Consumer Action is commenced in the Bankruptcy Proceeding or otherwise on notice to the Trustee while the Bankruptcy Proceeding is Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 13 of 19

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pending, the Trustee must notify the Enforcement Director in writing of any such final judgment, order or settlement. Such notification must include the amount of redress, if any, that the Estate paid or is required to pay to consumers, and to the extent available to the Trustee, describe the consumers or class of consumer to whom that redress has been or will be paid. VII.

Cooperation With Plaintiffs IT IS FURTHER ORDERED that:

42.

The Trustee shall notify the Bureau and States of the occurrence of any of the following:

a. The Trustee’s discovery of assets in the Estates or any assets that could be subject to a turnover motion by the Trustee;

b. The Trustee’s filing of a motion under 11 U.S.C. §363 in the Bankruptcy Case to use, sell, or lease property of the Estates;

c. The Trustee’s filing of any interim report to the Bankruptcy Court; and d. The closure of the Bankruptcy Case.

43.

In connection with this action, the Order, or any subsequent investigations related to or associated with the transactions or occurrences that are the subject of the Complaint, the Trustee shall provide reasonable and good faith cooperation to help Plaintiffs determine the identity and location of, and the amount of injury sustained by, each Affected Consumer, to the extent that such information has not previously been produced to Plaintiffs by the Trustee and to the extent that such information is in the Trustee’s possession or control. 44.

Within 21 calendar days of receipt of a written request from any Plaintiff, the Trustee must provide any available documents or information that are the subject of the request. Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 14 of 19

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VIII.

Notice IT IS FURTHER ORDERED that:

45.

Unless otherwise directed in writing by the Bureau, the Trustee must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, In re Prehired, et. al., Case No. 22-11007 (JTD) by email to [email protected]. The Trustee may send an additional copy by overnight courier or first-class mail to the below address: Assistant Director for Enforcement Bureau of Consumer Financial Protection ATTENTION: Office of Enforcement 1700 G. Street, N.W.

Washington D.C. 20552

46.

Unless otherwise directed by a representative of the State of Washington in writing, all submissions to the State of Washington pursuant to this order must be sent by email to [email protected]. The Trustee may send an additional copy by overnight courier or firstclass email to below address:

Tad Robinson O’Neill, Assistant Attorney General Washington Attorney General’s Office 800 Fifth Ave, Suite 2000 Seattle, Washington, 98104-3188.

IX.

Release 47.

The Bureau and States release and discharge the Prehired Defendants from all potential liability for law violations that the Bureau or any of the States has or might have alleged in the Complaint, to the extent such practices occurred before the Effective Date and the Bureau and States know about them as of the Effective Date. This release does not preclude or Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 15 of 19

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affect the right of the Bureau or the States to determine and ensure compliance with this Order or to seek penalties for any violations of this Order. X.

Retention of Jurisdiction IT IS FURTHER ORDERED that:

48.

The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.

Presented by:

ROBERT W. FERGUSON Attorney General

/s Tad Robinson O’Neill

TAD ROBINSON O’NEILL JULIA K. DOYLE SUSANA CROKE MADELINE DAVIS Assistant Attorneys General 800 Fifth Avenue, Suite 2000 Seattle, WA 98104 (206) 254-0570 [email protected] [email protected] [email protected] [email protected] Attorneys for Plaintiff State of Washington

Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 16 of 19

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ELLEN F. ROSENBLUM #753239 Attorney General

/s Marc Hull

MARC HULL #990621 Senior Assistant Attorney General Department of Justice 1162 Court Street NE Salem, OR 97301-4096 Telephone: (503) 934-4400 Facsimile: (503) 373-7067 [email protected] Attorneys for State of Oregon

/s Melissa Acevedo

TAYLOR STEINBACHER, Senior Counsel MELISSA ACEVEDO, Counsel 320 West 4th Street, Suite 750 Los Angeles, CA 90013 Attorneys for Plaintiff California Department of Financial Protection and Innovation

KATHLEEN JENNINGS Attorney General

/s Marion Quirk

MARION M. QUIRK (#4136) Deputy Attorney General Delaware Department of Justice 820 N. French St., Floor 5 Wilmington, DE 19801 (302) 683-8810 [email protected] Attorneys for the State of Delaware

/s Adam Welle

ADAM WELLE Assistant Attorney General Minnesota State Bar No. 0389951 (admitted per LR 9010-1(e)) Telephone: (651) 757-1425 Facsimile: (651) 296-7438 [email protected] Attorney for the State of Minnesota

/s Matthew Davies

MATTHEW DAVIES Assistant Attorney General Office of the Illinois Attorney General 100 W. Randolph Street, 12th Floor Chicago, Illinois 60601 Telephone: (773) 590-7807 Facsimile: (312) 814-2593 [email protected] Attorney for the State of Illinois

/s Jared Libet

JARED Q. LIBET Assistant Deputy Attorney General CLARK KIRKLAND Assistant Attorney General Office of the South Carolina Attorney General P.O. Box 11549 Columbia, SC 29211 Attorneys for the State of South Carolina

JOSHUA H. STEIN Attorney General of North Carolina

/s Danielle Wilburn Allen

DANIELLE WILBURN ALLEN Assistant Attorney General North Carolina State Bar No. 58141 North Carolina Department of Justice ANDREA JOY CAMPBELL Massachusetts Attorney General

/s Diana Hooley

DIANA HOOLEY, MA BBO No. 685418 LILIA V. DUBOIS, MA BBO No. 688848 Assistant Attorneys General Insurance and Financial Services Division

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Post Office Box 629 Raleigh, North Carolina 27602 Telephone: (919) 716-6975 Facsimile: (919) 716-6050 [email protected] Attorneys for the State of North Carolina

Office of the Attorney General One Ashburton Place, 18th Floor Boston, MA 02108 (617) 963-2198 (Hooley) (617) 963-2239 (DuBois) [email protected] [email protected] Attorneys for the Commonwealth of Massachusetts

JASON S. MIYARES Attorney General of Virginia

/s Jonathan Harrison II

JONATHAN M. HARRISON II Assistant Attorney General DAVID B. IRVIN Senior Assistant Attorney General Office of the Attorney General of Virginia 202 North Ninth Street Richmond, VA 23219 Telephone: (804) 786-6557 Facsimile: (804) 786-0122 [email protected] [email protected] Attorneys for the Commonwealth of Virginia

JOSHUA L. KAUL Attorney General of Wisconsin

/s Colin Stroud

COLIN R. STROUD Assistant Attorney General Wisconsin State Bar #: 1119457 Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Telephone: (608) 261-9224 Facsimile: (608) 294-2907 [email protected] Attorneys for Plaintiff State of Wisconsin ERIC HALPERIN Enforcement Director CARA PETERSEN Principal Deputy Enforcement Director ALUSHEYI J. WHEELER Deputy Enforcement Director OWEN MARTIKAN Assistant Litigation Deputy

/s Stefanie Goldblatt

STEFANIE ISSER GOLDBLATT JIM SAVAGE Enforcement Attorneys Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Telephone: (202) 573-4390 Facsimile: (703) 642-4585 [email protected] Attorneys for the Bureau of Consumer Financial Protection

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DON A. BESKRONE Chapter 7 Trustee

/s/ Ricardo Palacio x Ricardo Palacio (DE Bar No. 3765) ASHBY & GEDDES, P.A.

500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Telephone: (302) 654-1888 Facsimile: (302) 654-2067 Email: [email protected]

Attorneys for Don A. Beskrone, Chapter 7 Trustee

JOHN T. DORSEY UNITED STATES BANKRUPTCY JUDGE Dated: November 20th, 2023 Wilmington, Delaware Case 23-50438-JTD Doc 15 Filed 11/20/23 Page 19 of 19