Premier Consulting Group LLC and Law Office of Michael Lupolover
Documents in this case
- Complaint · · 13 p.
- Stipulation · · 13 p.
Case summary
The CFPB filed a complaint in a federal district court in New York against two debt-relief service providers that allegedly charged consumers illegal advance fees for debt-settlement services. The Bureau is seeking to halt the operations and to obtain both penalties and relief for victims.
Complaint ()
PDF of this document (13 pages)
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JUDGE SWEET
KENT MARKUS
Enforcement Director
ANTHONY ALEXIS
Deputy Enforcement Director for Field Litigation JEFFREY PAUL EHRLICH
Assistant Litigation Deputy for Field Litigation STEFANIE ISSER GOLDBLATT
J.H. JENNIFER LEE
Enforcement Attorneys
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552
Telephone: (646) 495-5186
Facsimile: (646) 495-5189
Email: [email protected]
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
CONSUMER FINANCIAL PROTECTION BUREAU,
Plaintiff, Vv.
MISSION SETTLEMENT AGENCY, d/b/a MISSION ABSTRACT LLC, MICHAEL LEVITIS in his individual and official capacity, LAW OFFICE OF MICHAEL LEVITIS, PREMIER CONSULTING GROUP LLC, LAW OFFICE OF MICHAEL LUPOLOVER,
Defendants.
Case No. 1:13-cv-
COMPLAINT
The Consumer Financial Protection Bureau (the Bureau) alleges the following against
Mission Settlement Agency, d/b/a Mission Abstract LLC (Mission), the Law Office of Michael
Levitis, Premier Consulting Group LLC (Premier), and the Law Office of Michael Lupolover
(together, the Corporate Defendants); and against Michael Levitis:
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INTRODUCTION
1. The Bureau brings this action under sections 1031(a), 1036(a), 1054(a), and 1061 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), 5581, and under the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 US.C. §§ 6102(c)(2), 6105(d), based on violations of the Telemarketing Sales Rule (TSR), 16 C.F.R. § 310 ef seq., in connection with the marketing and sale of debt-relief services and based on unfair and deceptive practices in violation of the CFPA, 12 U.S.C. §§ 5531, 5536.
JURISDICTION AND VENUE
2. This Court has subject-matter jurisdiction over this action because it is brought under a 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.
3. Venue is proper in this district under 28 U.S.C. § 1391(b), (c), and 12 U.S.C. § 5564(f).
PARTIES
4. The Bureau is an agency of the United States created by 12 U.S.C. § 5491(a). It has independent litigating authority, 12 U.S.C. § 5564(a), (b), including to enforce the TSR as it applies to persons covered by the CFPA, 15 U.S.C. §§ 6102(c)(2), 6105(d); 12 U.S.C. § 5531(a).
5. Mission is a for-profit company that is located and does business in this district. Mission has used office space at 280 Madison Avenue, Suite 300, New York, NY 10017 and has offices at 2713 Coney Island Avenue, Brooklyn, NY 11235.
6. The Law Office of Michael Levitis is a law firm located at 1729 E. 12" Street, Brooklyn, NY 11229. It does business in this district.
7. Premier is a for-profit company with offices at 180 Sylvan Avenue, 2" Floor,
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Englewood Cliffs, NJ 07632 and 1130 Hooper Avenue, Toms River, NJ 08753. It does business in this district.
8. The Law Office of Michael Lupolover is a law firm located at 180 Sylvan Avenue, 2" Floor, Englewood Cliffs, NJ 07632. It does business in this district.
9. Each Corporate Defendant engages in offering or providing a consumer financial product or service and is therefore a “covered person” under the CFPA. 12 U.S.C. § 5481(15)(A)(vili)ID, (6).
10. _ Levitis is the principal of Mission and the Law Office of Michael Levitis, and is heavily involved in their day-to-day operations. He approved, ratified, endorsed, directed, controlled, managed, and otherwise materially participated in the conduct of their affairs. Levitis is a “related person” under the CFPA. 12 U.S.C. § 5481(25). Because of his status as a related person, Levitis is a “covered person” for purposes of the CFPA. Id. Levitis does business in this
district.
SUMMARY OF COMPLAINT
11. Since at least September 2010, Defendants have marketed and sold debt-relief services to consumers. Defendants attracted financially distressed consumers through phone calls, mailings, and other solicitations promising substantial reductions in outstanding debts owed to unsecured creditors. In the course of offering their services, Defendants unlawfully collected fees in advance of providing any debt-relief services.
12. In addition, since at least July 2011, Mission and Levitis committed deceptive and unfair acts and practices causing substantial financial injury to consumers. Specifically, they misled consumers, impersonated a government agency, and gave false statements regarding fees
for Mission’s debt-relief service. Instead of being applied towards repayment of consumers’
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debts, a large percentage of the amounts that consumers paid into Mission’s debt-relief services program went to Mission, which provided scant meaningful assistance to resolve consumers’ debts and often left consumers in worse financial positions than before they enrolled.
THE CORPORATE DEFENDANTS’ BUSINESS PRACTICES
13. The Corporate Defendants sold or offered to sell debt-relief services to consumers. In exchange for a fee, the Corporate Defendants promised to renegotiate, settle, reduce, or otherwise alter the terms of at least one debt between a consumer and one or more unsecured creditors or debt collectors in accordance with a settlement agreement or other contractual agreement executed by the consumer.
14. The Corporate Defendants marketed their debt-relief services via the U.S. Mail, the Internet, and outbound or inbound telephone calls to or from consumers, including via at least more than one interstate telephone call.
15. The Corporate Defendants requested or received enrollment fees, processing fees, debt-relief service fees, and other types of fees in advance of settling at least one of the consumer’s debts.
16. Each of the Corporate Defendants separately entered into a contract with a payment processor to receive services for the management, processing, and administration of payments. Under this contract, the payment processor managed the savings account (Dedicated Account) of each and every consumer who contracted for debt-relief services from each of the Corporate Defendants.
17. | When consumers signed up to receive debt-relief services through the Corporate
Defendants’ respective debt-relief programs, the Corporate Defendants directed consumers to
sign up for the Dedicated Account with the payment processor. The Corporate Defendants also
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instructed consumers to stop paying their creditors and instead to start making payments into the Dedicated Account managed by the payment processor.
18. The Corporate Defendants represented to consumers that, if and when a consumer’s Dedicated Account reached a sufficient balance, they would instruct the payment processor to transmit funds to a consumer’s creditors to help satisfy the consumer’s debts.
19. At all times relevant to this Complaint, the Corporate Defendants required and relied on assistance from the payment processor to collect and disburse monies through the consumer’s Dedicated Accounts.
20. Consistent with the Corporate Defendants’ direction, the payment processor: (i) withdrew funds from a consumer’s bank account through ACH transfer and deposited them into the Dedicated Account, and (ii) transmitted funds from the Dedicated Account to itself and to the Corporate Defendants to cover processing and servicing fees, including the fee the Corporate Defendants charge to consumers for its debt-relief services. The transactions managed by the payment processor reflected that funds were routinely transferred out of a consumer’s Dedicated Account to pay the Corporate Defendant’s debt-relief fees before payments went to any creditors.
21. With respect to Dedicated Accounts that were established on or after October 27, 2010, the effective date of the TSR’s advance-fee ban, Mission and the Law Office of Michael Levitis collected fees from consumers in advance of settling the consumers’ debts totaling approximately $1.1 million.
22. With respect to Dedicated Accounts that were established on or after October 27, 2010, Premier collected fees from consumers in advance of settling the consumers’ debts totaling
approximately $187,830.
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23, With respect to Dedicated Accounts that were established on or after October 27, 2010, the Law Office of Michael Lupolover collected fees from consumers in advance of settling the consumers’ debts totaling approximately $111,809.
ADDITIONAL DEBT-RELIEF ACTIVITES OF MISSION
24. At Levitis’s direction, Mission impersonated a government agency to induce a higher volume of sales calls from consumers who incorrectly believed that Mission offered a government program. Mission routinely disseminated a written solicitation to consumers in an envelope bearing an image of the Great Seal of the United States for what Mission called the “Office of Disbursement.” Mission circulated this solicitation in order to cause consumers to believe Mission was affiliated with a government program and to enhance Mission’s ability to attract financially distressed consumers to receive debt-relief services. Mission’s debt-relief service was in fact not affiliated with the government.
25. Mission also misled consumers about the timing of fees for debt-relief services. Mission falsely asserted in the written solicitation that there were no “Upfront Fees” when in fact Mission charged them. Mission, at Levitis’s direction, did not inform consumers that Mission charges advance fees, and otherwise concealed and misrepresented the size of Mission’s fees.
26. Mission, at Levitis’s direction, also committed unfair acts and practices causing consumers substantial injury. Despite promising consumers that it would settle their unsecured debts for typically 55% of consumers’ total outstanding credit-card balances, Mission often: (i) concealed the fact that creditors will not be paid by the time that consumers expect, or might not be paid at all; (ii) charged exorbitant debt-relief services fees often without settling any debts; and (iii) left consumers in worse financial positions than before they enrolled in Mission’s
program.
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27. Specifically, many consumers enrolled in Mission’s program received zero or scant benefit in the form of settled debts and suffered net losses of approximately $1,300 to $3,000 per person. Consumers often learned from creditors that Mission had never contacted them. Unaware that this would occur, consumers had stopped communicating with and paying their creditors based on Mission’s representation that it would handle consumers’ debts on their behalf and based on Mission’s instruction to cease communicating with the creditors and to cease paying these creditors directly. Because Mission did not often make negotiated payments to creditors as it promised it would, many consumers suffered additional financial injury in the form of credit-card penalties, higher interest rates, and adverse effects on their credit. Many consumers faced lawsuits commenced by their creditors or had to file for bankruptcy.
28. By virtue of Mission’s own conduct, the substantial injury that Mission caused was not reasonably avoidable by consumers: Mission systematically erected barriers to prevent consumers from obtaining information regarding the disadvantages of its debt-relief program. Whether Mission was originating new consumer accounts or working to maintain existing consumer accounts, Mission communicated with consumers in a manner that prevented consumers from learning of the debt-relief program’s risks, costs, and conditions — the disclosures of which would have permitted consumers to ascertain the likelihood of consumer injury. For example:
a. At Levitis’s direction, Mission staff enrolled as many consumers as possible regardless of whether consumers understood Mission’s fee structure or other attributes of its debt-relief program.
b. Levitis directed Mission’s staff to conceal the debt-relief services fees
when enrolling new customers. If a consumer made specific inquiries
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regarding fees, Levitis told staff to explain that the fee was embedded in the overall amount that consumers contributed on a monthly basis to their Dedicated Accounts so that Mission could obscure how much money accrued to pay off underlying debts versus went to Mission. If the consumer continued seeking more information, Levitis, at times, allowed the Mission employees to reveal the size of the fee (18%) but even then instructed them to withhold other information, including the timing of fees. Mission staff followed Levitis’s instructions.
Mission employees avoided answering consumers’ questions about termination policies or the consequences of ineffective debt negotiations. Mission staff, at Levitis’s direction, used deliberate obfuscation — by providing nonresponsive or misleading answers — to confuse consumers about the program’s risks and costs. At other times, Mission staff dodged consumers’ questions by assuring consumers that answers would be provided by more knowledgeable Mission employees during a later meeting with the consumers — despite knowing that no such meeting would occur.
To retain the exorbitant fees paid into the program by consumers, Levitis instructed staff during periodic staff meetings not to issue refunds and to delay responding to consumers’ refund requests until they ceased to be made.
Before obtaining the consumer’s consent to pay for the program, Mission
failed to disclose the time by which it would make a bona fide settlement
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offer to the consumer’s creditors or debt collectors, or the amount that the consumer would have to accumulate in the Dedicated Account before Mission would initiate settlement attempts or make a bona fide settlement offer to the consumer’s creditors.
29. Mission’s conduct as described above ensured that consumers could not avoid _ substantial injury. Mission prevented consumers from learning information that would lead consumers to decide to forgo participation in the program. 30. Mission’s conduct did not generate any meaningful countervailing benefit to consumers or to competition.
LEVITIS’S INVOLVEMENT IN MISSION’S DEBT-RELIEF ACTIVITIES
31. Levitis managed Mission’s day-to-day operations, including activities that form the basis for this Complaint. Levitis approved the use of marketing materials bearing counterfeit government seals, demanded regular reports on sales and consumer complaints, directed employees to provide misleading information to consumers, and determined the outcome of consumer complaints and refund requests. Accordingly, Levitis engaged in the sale of debt-relief services provided by Mission.
32. _ Levitis also designed and implemented the business model through which Mission charged advance fees from consumers while often providing consumers little to no debt-relief services.
33. Levitis also retained payment processors on Mission’s behalf.
34. Since Mission’s inception, Levitis knew that Mission routinely charged fees before settling consumers’ debts and that Mission engaged in unfair and deceptive acts and
practices.
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COUNT ONE (VIOLATIONS OF THE TSR’S ADVANCE-FEE BAN) ASSERTED AGAINST ALL DEFENDANTS
35. The allegations in paragraphs 1 to 34 are incorporated here by reference.
36. In the course of telemarketing debt-relief services, the Corporate Defendants requested or received fees from consumers for debt-relief services before renegotiating, settling, reducing, or otherwise altering the terms of at least one of the consumer’s debts. The Corporate Defendants requested or received payment of these fees prior to consumers making at least one payment pursuant to any settlement agreement or other valid contractual agreement between consumers and their creditors.
37. The Corporate Defendants’ acts or practices from October 27, 2010 to present violate the TSR, 16 C.F.R. § 310.4(a)(5)(i), and are unlawful acts or practices in telemarketing. Because each Corporate Defendant is a “covered person,” each Corporate Defendant’s conduct in violation of the TSR is unlawful under sections 103 1(a) and 1036(a)(1)(A) of the CFPA, 12 USS.C, §§ 5531 (a), 5536(a)(1)(A). 15 U.S.C. § 6102(c)(2).
38. _ Levitis is a “related person” and a “covered person.” 12 U.S.C. § 5481(25). He is liable for violating the TSR, 16 C.F.R. § 310.4(a)(5)(i), and sections 103 1(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1).
COUNT TWO (DECEPTIVE ACTS AND PRACTICES IN VIOLATION OF THE CFPA) ASSERTED AGAINST MISSION AND LEVITIS
39. The allegations in paragraphs 1-34 are incorporated here by reference.
40. In numerous instances, in the course of advertising, marketing, promoting, offering for sale, the sale, or the performance of debt-relief services, Mission and Levitis have represented, directly or indirectly, that: Mission’s program was affiliated with the government
and Mission did not charge advance fees for debt-relief services. Both of these representations
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were material, false, and likely to mislead a reasonable consumer at the time they were made. 41. Therefore, the representations made by Mission and Levitis constitute deceptive acts and practices in violation of section 1036(a)( 1)(B) of the CFPA, 12 U.S.C. § 5536(a)(1)(B). 42. Levitis is a “related person” and a “covered person.” 12 U.S.C. § 5481(25). He is liable for the deceptive misrepresentations described above, in violation of sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1).
COUNT THREE (UNFAIR ACTS AND PRACTICES IN VIOLATION OF THE CFPA) ASSERTED AGAINST MISSION AND LEVITIS
43. The allegations in paragraphs 1-34 are incorporated here by reference.
44. Under the CFPA, an act or practice is unfair if it causes or is likely to cause consumers substantial injury which is not reasonably avoidable and if the substantial injury is not outweighed by countervailing benefits to consumers or to competition.
45. The acts and practices of Mission and Levitis — in particular the acts and practices set out in paragraphs 26 to 34 above — caused consumers substantial injury.
46. The substantial injury inflicted upon consumers was not reasonably avoidable.
47. The substantial injury inflicted on consumers was not outweighed by countervailing benefit to consumers or to competition.
48. Therefore, Mission engaged in unfair acts and practices in violation of sections 1036(a)(1)(B) and 1031(c)(1) of the CFPA. 12 U.S.C. §§ 5536(a)(1)(B) and 5531(c)(1).
49. Levitis is a “related person” and a “covered person.” 12 U.S.C. § 5481(25). He is liable for the unfair acts and practices described above, in violation of sections 103 1(a) and
1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1).
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COUNT FOUR (DECEPTIVE ACTS AND PRACTICES IN VIOLATION OF THE TSR) ASSERTED AGAINST MISSION AND LEVITIS
50. The allegations in paragraphs 1-34 are incorporated here by reference.
51. It is a violation for a debt-relief service provider to fail to disclose before the consumer consents to pay, or to misrepresent in the sale of debt-relief services, the amount of money or percent of debt that the consumer must accumulate before the debt-relief service provider will initiate attempts to settle the debt or before it will make a bona fide settlement offer to them. 16 C.F.R. § 310.3(a)(1)(viii)(B), (2)(x). It is also a violation for a debt-relief service provider to fail to disclose before the consumer consents to pay the time by which it will make a bona fide settlement offer to the consumer’s creditors or debt collectors. 16 C.F.R. § 310.3(a)(1)(viii)(A).
52. From September 27, 2010 to present, Mission did not disclose either the amounts that must accumulate or the time by which Mission will make a bona fide settlement offer, in violation of the TSR.
53. Because Mission is a “covered person,” its conduct in violation of the TSR is unlawful under sections 1031(a) and 1036(a)(1)(A) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(A). 15 U.S.C. § 6102(c)(2).
54. Levitis is a “related person” and a “covered person.” 12 U.S.C. § 5481(25). He is liable for violating sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a),
5536(a)(1).
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DEMAND FOR RELIEF
WHEREFORE, the Bureau requests that the Court: a. permanently enjoin Defendants from committing future violations of the CFPA, 12 U.S.C. §§ 5531, 5536, and the TSR, 16 C.F.R. § 310 ef seq.; b. award restitution against Defendants in the amount of all unlawfully
collected fees;
c. order disgorgement of ill-gotten profits against Defendants; d. award civil money penalties against Defendants; e. award attorneys’ fees and costs against Defendants; and f. award additional relief as the Court may determine to be just and proper. Dated: May 7, 2013 Respectfully submitted, KENT MARKUS Enforcement Director ANTHONY ALEXIS
Deputy Enforcement Director for Field Litigation
JEFFREY PAUL EHRLICH Assistant Litigation Deputy for Field Litigation
By: STEFANIE ISSER GOLDBLATT J.H. JENNIFER LEE Enforcement Attorneys Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Telephone: (646) 495-5186 Facsimile: (646) 495-5189 Email: [email protected]
Stipulation ()
PDF of this document (13 pages)
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U~ITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ............ --- ------------.. -----------·---.. -----------·------------- ..... --X. co:;..;sorvlliR FINANCL\L PROTECTION BUREAU, Plaintiff, -against- PREMIER CONSULTING GROUP LLC and LAW OFFICE OF MICHAEL LUPOLOVER, Defendants .
..... -...... ---·· ....... ----·-·--..... .................... ------------··- ... ··--- -----------.... ------X 1:13-cv-3064 (]LC) ~!mmt.STlPULt\TED FINAL .lll..PC!MENT ANJ2. ORDER 1be Consumer Financial Protection Bureau (the Bureau) commenced this civil action to obtain injunctive and monetary relief and civil penalties from Premier Consulting Group LLC, a/k/ a Premier Consultant Group llC, ('Premier') and the Law Office of Michael Lupolover (collecrively, "Defendants"). The. Complaint alleges violations of the 1'elemarketing Sales Rule ("TSR"), 16 C.F.R. § 310, in connection w:ith the marketing and sale of debt-relief services. TI1c parties, by and through respective counsel, agree to the entty of this Stipulated Final Ju<lgment and Order ("Order"). Defenda.nL'> waive: any right to seek judicial review or to othe.rw1se challenge or contest the validity of this Otde:r; apd any right that may arise in this case under the Equal Access to Justice Act, 28 US.C. § 2412 .
. ElNDINGS Ab'];? CONCLUSIONS 1.
The Bureau is an agency of the United States created by 12 U.S.C. § 5491 (a). It has independent. litigating authority, 12 U.S.C. § 5564(a) and (b), including to enforce the TSR as it applies to persons subject to the CFPA, 12 U.S.C. § 5531(a); 15 U.S.C. §§ 6102(c)(2), 610S(d). 2.
Premier is a for-profit company with offices at 120 Sylvan Avenue, Suite 300, USDC SDNY I 1,· .
DATESCANNED·~~ ' J-~.~~~D~Y.__ Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 1 of 13
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Englewood Cliffs, NJ 07632.
3.
The Law Office of Michael Lupolover is a law firm located at 120 Sylvan Avenue, S\.1ite 300, Englewood Cliffs, NJ 07632.
4.
Since at least September 2010, Defendants have m.'llketcd and sold debt-relief services to consumers. Such debt-relief services arc a consumes financial product or service. 12 U.S.C. § 5481(15)(A)(viii)(Il). Defendants a.re therefore. "covered persons" un<la the CFPA. 12 u.s.c. §.5481(6).
5.
This Court has subject-matter ju.risdiction over this action because it is brought under a federal consnrocr 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 l!.S.C. § 1345. 6.
Venue is proper in this districtunder28 U.S.C. § 1391~)) and (c), and 12 U.S.C. § 5S64(f).
7.
The Complaint st.ates a drum upon which relief can be granted. fo.r Defet1dants' alleged violation!' of the TSR, 16 C.F.R. § 310.4(a)(5)(i), and sections 1031(a) and 1036(a)(1)(A) of the CFPA, 12 U.S.C. §§ S531(a), 5536(a)(1)(A).
8.
The Bureau and Defendants agree to entry of this 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 to the date this Order is entered.
9.
Defendants do not admit or deny any of the allegations in the Complaint or this Order. However, for the p1.u-poses of this Order, Defendants adtnit the facts necessary to establish the Bureau's jurisdiction o·vcr Defendants and the subject matter of this action. 10.
The tenns and provisions of this Order shall be binding upon, and inure to the benefit of, the parties hereto and their successors or assigns in interest. 11.
En ti:y of this Order is in the public interest.
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 2 of 13
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DEFJNITIONS.
The following definitions apply to thi.9 Order:
12.
HAdvance Fee" means any fee or consideration requested or received by a Debt Relief Service Provider from a Consumer for any Debt Relief Service, whether directly or indirectly, that occurs before: (a) the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and (b) the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, o.t: other valid contract\.lal agreement between the Consumer and the creditor or debt collector. 13.
"Consumer" means an individual or an "gent, trustee, or representative acting on behalf of an individual 14.
"Debt· Relief Service" means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the tettns of payment or othe.r terms of the debt between a Consumer and one or more creditors or debt collectors, including but not limited to, a reduction in t.hc balance, interest rate, or fees owed by a person to a creditor or debt collector. 15.
"Debt-Relief Service Provider'' or "DRSP" means any Person that offers or provides any Debt-Relief Service.
16.
''Effective Date0 means the date this Order is entered. 17.
"Enforcement Director" means the Assistant Director of the Office of Enforcement for the Con.sumer Financial Protection Bureau, or his or her delegee. 18.
"Person" means any individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estr-te, cooperative organization, or other entity. 19.
~'Related Consumer Action>' means a private fl.ction by or on behalf of one or Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 3 of 13
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more Consumers or an enforcement action by another govenunental agency brought against Respondent based on substantially the same facts as described in the Complaint 20.
"1'clemarketing" means a pfan. program, or campaign that is conducted to induce the purch?.se of goods or services or a chaci.table contribution, by use of one or more telephones and which involves more than one .interstate telephone call. The term does not include the solicitation of sales through the mailing of a catalog wl->ich: contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of writte1.1 material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitations does not solicit customers by telephone but only receives calls initiated by customers in response to the cat.'llog and during those calls takes orders only without further solicitation. For purposes of the previous sentence, the term "furth('..t solicitation" does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog that prompted the customer's call or in a substantially similar catalog. ORDER A.
Injunction Against Tiling Advance Fees or Otherw:ise Violating the 'I'SR IT IS THEREFORE ORDERED that , 21.
Defendants, their officers, agents, servants, employees, and all persons who are in active concert or participation with any of them, who receive actual notice of this Order by person:u service or othenvi.se, whether acting direcrly or indirectly, are permanently rest.rained and enjoined from violating the TSR, 16 C.F.R § 310, including by requesting or receiving unlawful. Advance Fees.
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 4 of 13
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B.
Compliance Plan IT IS THEREFORE FURTHER ORDERED that, 22.
Within 120 days of the Effective Date, each of the Defendants must submit to the Enforcement Director for review and determination of non-objection a. comprehensive compliance plan designed to ensure that Defendants' Debt-Re1ief Services comply with all applicable F'ederil c011sumer financial laws and the terms of this Order. The compliance plans must: include, at a a. Detailed steps for addressing each action required by this Order; b. Comprehensive written policies and procedures designed to prevent violations of the TSR, 16 C.F.R. pt. 310, sections 1031(a) and 1036(a) of the CFPA, 12 U.S.C. §§ 5531 (a), 5536(a), or other Federal consumer financial laws, and associated risks to Consumers;
c.
Effective training programs that include regular _and specific training regarding the TSR, Federal consumer fi.o.anci.il. laws, and associated risks to Consume.rs; d. Enhanced and documented compliance monitoring processes; e. Effective Consumer cotnplaint monitoring pxocesses; and f.
Specific timeframes and deadlines for ilnplemcnti.tiou of the steps described above.
23.
T'ne Enforcement Director will have the discretion to make determinations of nonobjection to each Compliance Plan or direct a Defendant to revise it. If the Enforcement Di.rector directs a Defendant to revise a Compliance Plan, the Defendant must make the revisions and resubmit the Compliance Plan to the Enforcement Dir.cc tor within 30 days. 24.
After receiving notification that the Enforcement Director has made a determination of rw n --objeccion to a Compliance Plan, a Defendant must implement ru:1d adhere to the steps, recom.mendations, deadlines, and timeframes outlined in the Compliance Plan. Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 5 of 13
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C.
Customer Information lT IS THEREFORE FURTHER ORDERED that, 25.
Defendants, and their officers, agents, servants, employees, and attorneys who receive actual notice of this Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, add.re.ss, 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 a Defendmt obtair1ed before the Effective Date in connec:tion with debt-settlement services. However, customer information may be disclosed if tequested by a government agency or required by law, rct.,'Ulation, or court order.
D.
Order to Pay Civil Money Penalty IT IS THEREFORE FURTHER ORDERED that:, 26.
Under Section 1055(c) of the CFPA, 12 C.S.C. § 5565(c), and taking into account the factors set forth in 12 lJ.S.C. § 5565(c)(3), Defendant Prem.ier ml1st pay a civil money pt.'11alty of $69,075 to the Bureau.
27.
Defendant Premie.:c must pay the civil money penalty by wire transfer to the Bureau or to the Bureau's agent in compliance with the Bureau's wiring instructions. 28.
Defendant Premier must pay this atnount according to the following schedule: a.
'W.ithi.'1 10 days of the Effective Date, $23,025; b. by March 9, 2015, $23,025; and c.
by June 8, 2015, $23,025.
29.
The civil money penalty paid l.Ulder this Order will be deposited in the Civil Penalty Fund of the Bureau in accordance with Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 30.
Defendant Premier must treat the civil money penalty pa.id under this Order as a peoalty paid to the government for all putposes. Regar.dless of how the Bureau ultimately uses those funds, Defendant Premier may not:
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 6 of 13
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a.
Clfil.m, 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 ma.de under any insurance policy, with regard to any civil money penalty paid under thls Order. 31.
To preserve the deterrent effect of the civil money penalty, in any Related Consumer Action, Defendants may not argue that Defendants are entitled to, nor may Defendants benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action becau:;e of the civil money penalty paid in this action ("Pc.natty Offset''). If the court in any Related Consumer Action grants such a Penalty Offset, Defendants must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in chis action. 32.
In the event of any default on Defendant Premier's obligations to make payment unde.r this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue o,n any outstanding amounts not paid from the date of default to the date of payment, and ~rill immediately become due and payable.
33.
Defendant Premier must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds rn.ay be returned to Defendant Premier.
34.
Under 31 U.S.C. § 770'1, Defendant Premier, unless it already has done so, must furnish to the Bu.reau its taxpayer identifying numbers, whicb may be used for purposes of collecting and reporting on any delinquent amount a.rising out of this Order. 35.
Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Defendants must notify the Enforcement Di.rector of the fina1 judgment, consent order, o.r scttle.ment.in writing. That notification must indicate the amount of.redress, if any, Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 7 of 13
Page 22
that Dtfendants paid or arc required to pay to Consumers and should describe the Consumers or classes of Consumers to whom that re.dress has been or will be paid. 36.
Unde.r Section 604(a)(I) of r.he Fair Credit Reporting Act, 15 li.S.C.§ 1681 b(a)(1), any consumer .re11orting agency may fu.rnish a consumer .report concerning De.fondant Pre.mi.er to the Bureau, wruch shall be used for purposes of collecting and reporting on any delinquent amount a.rising out of thfa Order.
E.
Reporting Requirements IT IS THEREFORE FURTHER ORDERED that, 37.
Each Defendant 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 ro this Orde.r; the filing of any bankruptcy or insolvency proceeding by or against the Defendant; o.r a change in the Defendant's name or address. 38.
Within 7 days of the Effective Date, each Defendant must: a. Designate at least one telephone number and an emfill, physical, and postal address as points of contact, which the Buteau may use to communicate with tht: Defendant;
b. Identify all bus:inesses for which the Defendant is the majority owner, or that the Defendant directly or indirectly controls, by all of their names, telephone munbers, and physical, postal, email, and Internet addresses; c.
Describe the activities of each such business, including the products and services offered, and the means of advcrtisirig, markc·cing, '<1.0d sales; 39.
Each Defendant must report any change in the information required to be suLmittcd under Paragraph 38 at least 30 days before the change or as soon as practicable after learning about the change, whichever is soon('.t.
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 8 of 13
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40, Within 90 days of the Effective Date, and aga.in one year after the Effective Date, each Defendant must submit to the Enforcement Director an accurate written compliance progress report (Compliance Report), which, at a minimum, dcscnbcs in. dct'lil the manner and fonn in which Respondent has complied with this Order.
41.
.l\fter the one-year period, Respondent must submit to the Enforcement Director additional Compliance Reports within 14 days of receiving a written request from the Bureau. F.
Order Distribution and Acknowledgement IT IS 'fHEREFORE FURTHER ORDERED th.,'lt, 42.
Within 7 days of the Effective Date, each Defendant must submit to the Enforcement Director a.n acknowledgment of receipt of this Order, sworn under penalty of perjury. 43.
Within 30 days of the Effective Date, each Defendant shaJl deliver a copy of this Order to any managers, employees, service providers, or other agents or representatives of Defendants who have responsibilities related to the subject matter of the Or.dcr. 44.
For 3 yea.rs from the Effective Date, each Defendant must deliver a copy of this Orde.r to any business entity resulting from any change iil structure refetred to in Section E, as well as to any manage.i:s, employees, service providers, or other agents and representatives who will have responsibilities related to the subject matter of the Order before they assume their responsibilities. G.
Rccordkeeping IT IS THEREFORE FURTHER ORDE.RED that, 45.
Defendants must c.reate, for at least 3 years from the Effective Date, the follm.v:ing business records:
a.
All documents and records necessary to demonstrate full compliance with each p.rovision of this Order, including all submissions to the Hureau. b. For each itldividual Consumer to whom a Defendant provides Debt-Relief Services: the Consumer's name, address, phone number, email address; the date Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 9 of 13
Page 24
the Consumer enrolled irl the Debt-Relief Service; all payments a:nd transactions related to the Consumer; and, if applicable, the date and 1'.eason the Consumer left the Debt-Relief Se.rvice prot,~am.
c.
Copies of all sales scripts; training materials; advcrtiscmcnt.s; websites; and other tna:tkcting materials; and including any such materials used by a third party on behalf of a Defendant d. For Defendants' Debt-Relief Services, accounting records showing the gross and net revenues generated by the Debt-Relief Se.rvices. c.
All Consumer complaints and refund requests (whether received directly o.r indirectly, such as through a third party), and any responses to those <:omplai.nts or requests.
f.
Records showing, for ead1 employee providing services related to the Defendants' Debt-Relief Services, that person's: name; telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the .reason for termination.
g.
Records showing, for each setvi.ce provider providing services related to the Defendants' Debt-Relief Services, the name of a point of contact, and that person's telephone number; email, physical, and postal address; job ti.tie or position; dates of service; and, if applicable, the reason for tennination. 46.
Defendants must retain the documents identified in Paragraph 45 for at least 3 years. 47.
Defendants must make the documents identified in Paragraph 45 available to the Bureau upon the Bureau's request.
H.
Notices IT IS THEREFORE FURTHER ORDERED that, 48.
Unless othe.i:wise directed in writing by the Bureau, Defendants must provide all sub1nissions. requests, communications, or other documents relating to this Order in w.tlting, -u.':ith Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 10 of 13
Page 25
the subject line, "In re Premier Consultant Group LLC, et al., File No 2012-0371-02," and send them either:
a. By overnight courier (not the U.S. Postal Service), as follows Assistant Director for Enforcement Consumer Financial Protection Bureau ATI'EN'I10N: Office of Enforcement 1625 Eye Street, N.W.
Washington D.C. 20006; or b. Dy first-class mail to the be.low address and contemporaneously by email to _En f 2;r.ci.:11t.tt.nt Cow.pJfa.ll.t:.e@~ftJP_,,gQY· Assistant Director for Enforcement Consumer Financial Protection Bureau }t1TENTIO:\f: Office of Enforcement 1700 G St., N.W.
Washington D.C. 20552 L Cooperation with Bureau Counsel IT IS THEREFORE FURTHER ORDERED that, 49.
Defendants must cooperate folly with the Buteau in this matter and in any .investigation related to or associated with the conduct described in the Complaint Defendants must provide truthful and complete infonn.ation, evidence, and testimony. Defendants must cause their office.rs, employees, representatives, or agents to appear for interviews, discovery, hearings, trials, and any othcz proceedings that the Bureau tnay reasonably request upon 5 days w:r.itten notice, or other reasonable notice, at such places and times as the Bureau may designate, without the sernce of compulsory process.
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 11 of 13
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J.
Compliance Monit0ring IT IS THEREFORE FURTHER ORDERED that, 50.
Within 14 days of receipt of a written request from the Bureau, Defendants must submit additional compliance repo.rts or other reguested information, which tnust be made under penalty of perjury; provide sworn testimony; or produce documents. 51.
For purposes of this Section, the Bureau may communica tc ditcc..-tly with Defendants, unless Defendants retain counsel related to these communications. 52.
Defendants must permit Bureau representatives to inten>1ew any employee ot or.her person affiliated with a Defendant who has agreed to such an interview. The person interviewed may have counsel present.
53.
Nothing in this Order will limit r.he Bureau's lawful use of compulsory proces~, undc_r: 12 C.F.R. § 1080.6.
54.
For the duration of the Order, Defendants agree to be subject to the Bureau's supe.rvisory authority under 12 U.S.C. § 5514. Consistent with 12 C.F.R. § 1091.111, Defendants may not petition for termination of supervision under 12 C.F.R. § 1091.113. K.
Administrative Provisions IT IS THEREFORE FURTHER ORDER.ED that, 55.
Calculation of time limitations will run from the Effective Date and be based on calendar days, unless otherwise noted.
56.
'The provisions of this Order will be enforceable by the Bureau. For any violation of this Order, t.he Bureau may impose the maximum amount of civil money penalties allowed under section 1055(c) of th~ CFP Act, 12 U.S.C. § 5565(c). In connection with any attempt by the Bureau to enforce this Order in federal district court, the Bureau may serve Defendants wherever Defendants may be found and Defendants may not contest the court's personal jurisdiction. over them.
Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 12 of 13
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Case 1:13-cv-03064-JLC Document 34 Filed 12/04/14 Page 13 of 13
57. This Order contains the complete agreement between the parties. The parties have made no promises, representations, or warranties other than what is contained in this Order. This Order supersedes any prior oral or written communications, discussions, or understandings.
58. Nothing in this Order may be construed as Alowing Defendants, or their officers ox
employees to violate any law, cule, or regulation.
T.. Retention of Jurisdiction IT IS THEREFORE FURTHER ORDERED that, 59. The Court will retain jurisdiction of this matter for purposes of construction,
medification, and enforcement of this Order.
$O STIPULATED CONSUMER FINANCIAL FROTECTION PREMIER CONSULTING GROUP LLC BUREAU LAW OFFICE OF MICHAEL LUPOLOVER BU Apo OAraty _ Michael Beckner ” ~ . a inne ataettien! Stefanie Tkser Goldblatt Michael Bachner Attorney for Plaintiff Consumer Financial Attorney for Defendants Protection Bureau Premier Consulting Group LLC
Law Office of Michael Lupolover
WHERERS, THE PROPOSED ORDER APPERRS TO BE FAIR AND REVS
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IT IS SO ORDERED | fe oF BE a ge “ny Ef op fp fe Aye
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