Timemark, Inc., Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway
Documents in this case
- Complaint · · 13 p.
- Stipulation · · 14 p.
Case summary
On July 7, 2020, the Consumer Financial Protection Bureau settled with Timemark, Inc., a company based in Deerfield Beach, Florida, that provides debt-relief services to consumers with federal student-loan debt, and with its owners and officers, Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway. The Bureau alleged that the defendants charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to consumers who were seeking to renegotiate, settle, reduce, or alter the terms of their loans. If entered by the court, the proposed order memorializing the settlement will permanently ban defendants from providing debt-relief services and impose a judgment totaling approximately $3.8 million in consumer redress and civil money penalties.
Complaint ()
PDF of this document (13 pages)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION Case No. -C9 BUREAU OF CONSUMER FINANCIAL PROTECTION, Plaintiff, vs.
TIMEMARK SOLUTIONS, INC., TIMOTHY LENIHAN, SR., MARK NAGLER, and CASEY GASSAWAY, Defendants.
________________________________/ COMPLAINT 1.
The Bureau of Consumer Financial Protection (Bureau) brings this action against Timemark Solutions, Inc., Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway (Defendants) alleging abusive telemarketing practices in violation of the Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act), 15 U.S.C. §§ 6101 et seq., and its implementing rule, the Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310, as well as violations of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536(a)(1)(A). The Bureau brings this action in connection with Defendants’ offering debt-relief services to consumers with federal student-loan debt. Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 1 of 13
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2.
From 2016 through October 2019, Defendants harmed consumers nationwide by charging consumers with federal student loan debt unlawful advance fees through their debt-relief business. 3.
The Bureau brings this action to obtain relief for harmed consumers, enjoin Defendants from repeating or continuing their unlawful conduct, and impose civil money penalties on Defendants for their unlawful actions. JURISDICTION AND VENUE 4.
This Court has subject-matter jurisdiction over this action because it is brought under federal consumer financial law, 12 U.S.C. § 5565(a)(1), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.
5.
Venue is proper in this district pursuant to 12 U.S.C. § 5564(f) because Defendants are located, reside, or do business in this district. PARTIES 6.
The Bureau is an independent agency of the United States. 12 U.S.C. § 5491(a). The Bureau is charged with enforcing federal consumer financial laws. 12 U.S.C. §§ 5563 and 5564. The Bureau has independent litigating authority, 12 U.S.C. §§ 5564(a) and (b), including the authority to enforce the TSR with respect to the offering or provision of a consumer financial product or service subject to the CFPA, 15 U.S.C. §§ 6102(c), 6105(d).
7.
Defendant Timemark Solutions, Inc. (Timemark), based in Deerfield Beach, Florida, is a company that operated from 2016 through October 2019, offering debt-relief services to consumers with federal student-loan debt. Timemark is owned by Defendants Lenihan, Nagler, and Gassaway. Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 2 of 13
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8.
Defendant Timothy Lenihan, Sr. resides in Boca Raton, Florida. Lenihan is a co-founder and President of Timemark, and a 30% shareholder in the company.
9.
Defendant Mark Nagler resides in Boca Raton, Florida. Nagler is a co-founder, Vice President, Treasurer, and Secretary of Timemark, as well as a 30% shareholder in the company.
10.
Defendant Casey Gassaway resides in Parkland, Florida. Gassaway is a Vice President of Timemark and a 40% shareholder in the company. FACTUAL ALLEGATIONS 11.
Timemark is a company that offered to, and did, prepare and submit paperwork for consumers to the U.S. Department of Education in support of applications for loan consolidation, income-driven repayment plans, loanforgiveness programs, and other debt-relief options available to consumers with federal student-loan debt.
12.
Timemark marketed its debt-relief services nationwide, using websites, including timemarksolutions.com and loan-counselors.com, creating and posting YouTube videos, and placing Google Ads. Each of these marketing channels provided a phone number for consumers to call to sign up for Timemark services. When a consumer with federal student-loan debt called the number, the consumer reached a Timemark sales representative on the telephone. The sales representative explained Timemark’s services, encouraged the consumer to sign up, and discussed the fees charged for the services. 13.
Once the consumer agreed to sign up for the services and to pay the requisite fees for the services, the sales representative would email the serviceagreement package for the consumer to sign electronically. The consumer typically signed the service-agreement documents while on the phone with the Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 3 of 13
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sales representative.
14.
After the consumer signed up for the services, the consumer was transferred by phone to a customer-service representative who would, among other things, verify the consumer’s payment information and collect documents and other information from the consumer in order to process the paperwork required for the consumer’s application for the loan consolidation, income-based repayment plan, or loan-forgiveness program offered by the U.S. Department of Education. After it received the required documentation, Timemark submitted the application to the Department of Education; this could happen the same day or a week later. After that, the application would take at least a few weeks and sometimes months to be processed before approval by the Department of Education. 15.
Timemark’s service-agreement package included the client agreement, a limited power-of-attorney authorization form, and a paymentauthorization form. The client agreement set forth the debt-relief program offered by the Department of Education for which Timemark would prepare and submit the paperwork, and the payment-authorization form set forth the fees for that service, listing the dates and amounts of payments due to Timemark and when they would be charged.
16.
Timemark’s fees for the debt-relief service generally ranged from $99 to $699. The consumer could pay the entire fee in one payment or make payments for up to about four months. Timemark usually received the first payment for the service within a few days, or at the latest within 30 days, of the consumer signing the service-agreement documents. Timemark received this first payment, and sometimes the entire amount due, before the Department of Education would approve a consumer’s application for debt-relief, and before a consumer could make a first payment on newly altered debt.
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17.
Before Timemark was established, Lenihan, Nagler, and Gassaway worked as salespeople at a now-defunct company that offered the same services as Timemark. In early 2016, Lenihan and Nagler founded Timemark, modeling it on this defunct company and using a similar service-agreement package. In or about the summer of 2016, Lenihan and Nagler recruited Gassaway to join Timemark. After that, Lenihan, Nagler, and Gassaway shared ownership of the company, with Lenihan and Nagler holding 30% each, and Gassaway holding 40%. Lenihan, Nagler, and Gassaway jointly managed the company. 18.
Lenihan hired, trained, and supervised the sales representatives. Lenihan was supposed to provide approval if a sales representative offered a reduced fee for a consumer.
19.
Nagler was in charge of Timemark’s finances, including arranging for the issuance of remote checks from a consumer’s checking account to pay the fees, and keeping track of the revenue of the company. He also oversaw the customer service team and handled consumer complaints. 20.
Gassaway was responsible for Timemark’s marketing campaigns. 21.
The fee amount and timing were set and/or controlled by Lenihan, Nagler, and Gassaway, and they were all aware, either through their roles at the company or based on their experience at the now-defunct company on which Timemark was modeled, of the timing of payments, the fact that Timemark made sales through representatives on the telephone, and the fact that those sales calls involved more than one interstate telephone call. 22.
As of October 30, 2019, Timemark received $3,784,360 in fees from around 7,329 consumers for its debt-relief services. DEFENDANTS’ VIOLATIONS OF THE TSR 23.
The Bureau is authorized to enforce the Telemarketing Act and the Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 5 of 13
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TSR with respect to the offering or provision of a consumer financial product or service subject to the CFPA. 15 U.S.C. § 6105(d). Among other things, a consumer financial product or service is defined by the CFPA to include “providing financial advisory services…including…providing services to assist a consumer with debt management or debt settlement [or] modifying the terms of any extension of credit….” 12 U.S.C. § 5481(15)(A)(viii)(II). 24.
The TSR defines “debt relief service” as “any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including, but not limited to, a reduction in the balance, interest rate, or fees owed by a person to an unsecured creditor or debt collector.” 16 C.F.R. § 310.2(o).
25.
The TSR defines a “seller” as “any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration.” 16 C.F.R. § 310.2(dd).
26.
The TSR defines “telemarketer” as “any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer….” 16 C.F.R. § 310.2(ff).
27.
The TSR defines “telemarketing” in relevant part as “a plan, program, or campaign which is conducted to induce the purchase of goods or services . . . by use of one or more telephones and which involves more than one interstate telephone call.” 16 C.F.R. § 310.2(gg).
28.
As defined in the TSR, Timemark is a telemarketer that engaged in telemarketing of its debt-relief services to consumers. Timemark’s marketing of its services included a telephone number, which, when called by consumers, would Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 6 of 13
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connect to Timemark sales representatives. This was done as part of a “plan, program, or campaign” to sell Timemark’s services, and involved more than one phone and more than one interstate phone call. Consumers calling the telephone number were located in a number of different states outside of Florida, where Timemark is located.
29.
Timemark is a seller under the TSR because, in connection with its telemarketing, it offered to provide, and did provide, services related to federal student-loan debt in exchange for a fee. Those services were debt-relief services under TSR because Timemark represented it would alter the terms of repayment or other terms of consumers’ federal student-loan debt. COUNT I Request and Receipt of Advance Fees for Debt Relief Services in Violation of the TSR (All Defendants) 30.
The Bureau re-alleges and incorporates by reference Paragraphs 1 to 29.
31.
It is an abusive telemarketing act or practice in violation of the TSR for any seller or telemarketer to request or receive payment of any fee or consideration for debt-relief services unless and until: (A) the seller or telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt-management plan, or other such valid contractual agreement executed by the customer; and (B) the customer has made at least one payment pursuant to that settlement agreement, debtmanagement plan, or other valid contractual agreement between the customer and the creditor or debt collector. 16 C.F.R. § 310.4(a)(5)(i)(A)-(B). 32.
In the course of offering to provide, or providing debt-relief services, Timemark has requested and received the payment of fees from consumers before Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 7 of 13
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renegotiating, settling, reducing, or otherwise altering the terms of at least one of the consumers’ debts, and before the consumers had made at least one payment on such altered debts. Timemark has thereby violated the TSR. 16 C.F.R. § 310.4(a)(5)(i)(A)-(B).
33.
Lenihan, Nagler, and Gassaway participated in or had the authority to control the requests that Timemark made for consumers to make payment of fees before the terms of their debts had been altered, or participated in or had the authority to control Timemark’s receipt of payment of fees from consumers prior to the alteration of the terms of their debt. They also participated in or had the authority to control the telemarketing of the debt-relief services by Timemark. 34.
Lenihan, Nagler, and Gassaway knew, or were reckless to the fact, that Timemark requested the payment of fees, or received fees before the terms of those consumers’ debts were altered, and before those consumers had made at least one payment on such altered debts. They also knew, or were reckless to the fact, that Timemark’s debt-relief services were offered in connection with telemarketing.
35.
Therefore, all Defendants have engaged in abusive telemarketing acts or practices in violation of 16 C.F.R. § 310.4(a)(5). COUNT II Providing Substantial Assistance or Support to Timemark in Its Violation of the TSR (Timothy Lenihan, Mark Nagler, and Casey Gassaway )
36.
The allegations in Paragraphs 1 to 35 are incorporated here by reference.
37.
The TSR prohibits any person from providing substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 8 of 13
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knowing that the seller or telemarketer is engaged in any act or practice that constitutes deceptive or abusive conduct under the TSR. 16 C.F.R. § 310.3(b). 38.
In the course of offering to provide, or providing debt-relief services to consumers, Timemark requested and received the payment of fees from consumers before renegotiating, settling, reducing, or otherwise altering the terms of at least one of the consumers’ debts, and before the consumers had made at least one payment on such altered debts. Thus, Timemark engaged in acts or practices that violated the TSR. 16 C.F.R. § 310.4(a)(5)(i)(A)-(B). 39.
Lenihan provided substantial assistance or support to Timemark by hiring, training, and supervising the sales team. 40.
Nagler provided substantial assistance or support to Timemark by handling customer service, the company’s finances, and customer complaints. 41.
Gassaway provided substantial assistance or support to Timemark by handling its marketing.
42.
Lenihan, Nagler, and Gassaway knew, or consciously avoided knowing, that Timemark provided its debt-relief services in connection with telemarketing.
43.
Lenihan, Nagler, and Gassaway knew, or consciously avoided knowing, that Timemark requested and received fees from consumers before the terms of those consumers’ debts were renegotiated, settled, reduced, or otherwise altered, and before those consumers had made at least one payment on such altered debts.
44.
Therefore, Lenihan, Nagler, and Gassaway violated 16 C.F.R. § 310.3(b).
DEFENDANTS’ VIOLATIONS OF THE CFPA 45.
Section 1036(a)(1)(A) of the CFPA provides that it is “unlawful for Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 9 of 13
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any covered person to offer or provide to a consumer a financial product or service not in conformity with Federal consumer financial law, or otherwise commit any act or omission in violation of a Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A).
46.
Timemark is a covered person because it offers or provides consumer financial products or services, namely financial advisory services to assist consumers with modifying the terms of any extension of credit. 12 U.S.C. §§ 5481(6), (15)(A)(viii)(II).
47.
Under the CFPA, a “related person” is a covered person. 12 U.S.C. § 5481(25)(B). Lenihan, Nagler, and Gassaway are related persons of Timemark, as each one is an “officer[] or employee charged with managerial responsibility for” Timemark, and a “shareholder…who materially participates in the conduct of affairs” of Timemark. 12 U.S.C. § 5481(25)(C)(i) and (ii). Therefore, Lenihan, Nagler, and Gassaway are covered persons.
COUNT III CFPA Violations Based on Violations of the TSR (All Defendants) 48.
The allegations in paragraphs 1 to 47 are incorporated by reference. 49.
A violation of a federal consumer financial law by a covered person is a violation of the CFPA. 12 U.S.C. § 5536(a)(1)(A). 50.
The Telemarketing Act and the TSR are federal consumer financial laws as defined by the CFPA. 12 U.S.C § 5481(14); 15 U.S.C § 6105(d). 51.
Therefore, Defendants’ violations of the TSR, described in Counts I and II, constitute violations of section 1036(a)(1)(A) of the CFPA. 12 U.S.C. § 5536(a)(1)(A).
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DEMAND FOR RELIEF WHEREFORE, the Bureau requests, under 12 U.S.C. § 5565, that the Court: a.
impose appropriate injunctive relief against Defendants for their violations of the TSR and the CFPA;
b.
grant additional injunctive relief as the Court may deem to be just and proper;
c.
award monetary relief against Defendants including but not limited to rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement or compensation for unjust enrichment, and payment of damages;
d.
award the Bureau civil money penalties; e.
award the Bureau the costs of bringing this action; and f.
award such other and additional relief as the Court may determine to be just and proper.
Dated: July 7, 2020 Respectfully submitted, THOMAS G. WARD Enforcement Director DAVID RUBENSTEIN Deputy Enforcement Director CYNTHIA LESSER Assistant Deputy Enforcement Director /s/ Rina Tucker Harris____________ RINA TUCKER HARRIS Senior Litigation Counsel DC Bar 444550 [email protected] Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 11 of 13
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Bureau of Consumer Financial Protection 1700 G Street NW Washington, DC 20552 (202) 435-9196 Attorneys for Plaintiff Bureau of Consumer Financial Protection Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 12 of 13
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Certificate of Service I hereby certify that a true and correct copy of the foregoing was served by CM/ECF and email on July 7, 2020 to all counsel on the Service List below. /s/ Rina Tucker Harris Robby H. Birnbaum Greenspoon Marder LLP 100 West Cypress Creek Road, Suite 700 Fort Lauderdale, Florida 33309 Telephone: (954) 343-6959 Facsimile: (954) 343 6960 Email: [email protected] Franklin Homer Greenspoon Marder LLP 2255 Glades Road, Suite 400-E Boca Raton, FL 33431 Telephone: (954) 267-8028 Facsimile: (954) 267.8029 Email: [email protected] Attorneys for Defendants Timemark Solutions, Inc., Timothy Lenihan, Sr., Mark Nagler and Casey Gassaway Case 9:20-cv-81057-RS Document 1 Entered on FLSD Docket 07/07/2020 Page 13 of 13
Stipulation ()
PDF of this document (14 pages)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION
Case No. 9:20-CV-81057
BUREAU OF CONSUMER FINANCIAL PROTECTION,
Plaintiff, v.
TIMEMARK SOLUTIONS, INC., et al., Defendants.
/
STIPULATED FINAL JUDGMENT AND ORDER
This matter is before the Court on the Parties’ Joint Motion for Entry of Stipulated Final Judgment and Order (the “Motion”) [DE 3], filed herein on July 7, 2020. The Court has carefully reviewed the Motion and the record and is otherwise fully advised in the premises. The Bureau of Consumer Financial Protection (Bureau) commenced this civil action on July 7, 2020 to obtain injunctive and monetary relief and civil penalties from Timemark Solutions, Inc., Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway. The Complaint alleges violations of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101 et seq., and its implementing rule, the Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310, as well as violations of Section 1036(a)(1)(A) of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536(a)(1)(A), in connection with Defendants’ telemarketing and offering and sale of debt-relief services to consumers with federal student-loan debt.
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The Bureau and Defendants agree to entry of this Stipulated Final Judgment and Order (Order) to settle and resolve all matters in dispute arising from the conduct alleged in the Complaint.
FINDINGS 1. This Court has jurisdiction over the parties and the subject matter of this action. 2. Defendants neither admit nor deny the allegations in the Complaint, except as specifically stated herein. For purposes of this Order, Defendants admit the facts necessary to establish the Court’s jurisdiction over them and the subject matter of this action. 3. The Complaint alleges claims upon which relief may be granted. 4. In the course of telemarketing and offering or providing debt-relief services from 2016 through October 2019, Defendants requested and received payment of fees or consideration from consumers for such services before (1) they had renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreement. 5. The relief provided in this Order is appropriate and available pursuant to sections 1054 and 1055 of the CFPA, 12 U.S.C. §§ 5564 and 5565.
6. 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. 7. Entry of this Order is in the public interest.
DEFINITIONS The following definitions apply to this Order:
8. “Affected Consumer” means any consumer who paid Corporate Defendant for a Debt-Relief Service from 2016 through October 2019. 9. “Assisting Others” includes, but is not limited to: a. formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not limited to, any Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 2 of 14
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telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; b. formulating or providing, or arranging for the formulation or provision of, any marketing support material or service, including web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services, or media placement services; c. consulting in any form whatsoever;
d. providing names of, or contributing to the generation of, potential customers;
e. participating in or providing services related to the offering, sale, or servicing of a product, or the collection of payments for a product; f. acting or serving as an owner, officer, director, manager, principal, partner, or limited partner of any entity; and g. investing or loaning money.
10. “Corporate Defendant” means Timemark Solutions, Inc., and its successors and assigns.
11. “Debt-Relief Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including, but not limited to, a reduction in the balance, interest rate, or fees owed by a person to an unsecured creditor or debt collector.
12. “Defendants” means the Corporate Defendant and all of the Individual Defendants, individually, collectively, or in any combination. 13. “Effective Date” means the date on which the Order is entered by the Court. 14. “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegate. 15. “Individual Defendants” means Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway, collectively, or in any combination, and each of them by any other names by which they might be known.
16. “Person” means an individual, partnership, company, corporation, association Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 3 of 14
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(incorporated or unincorporated), trust, estate, cooperative organization, or other entity. 17. “Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against any Defendant based on substantially the same facts as described in the Complaint. CONDUCT RELIEF I Permanent Ban on Debt-Relief Services
IT IS ORDERED that:
18. Defendants, whether acting directly or indirectly, are permanently restrained from: a. advertising, marketing, promoting, offering for sale, selling, or providing any Debt-Relief Service;
b. Assisting Others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt-Relief Service; and c. receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any Person engaged in or assisting in advertising, marketing, promoting, offering for sale, selling, or providing any Debt-Relief Service.
Nothing in this Order shall be read as an exception to this Paragraph. II Customer Information IT IS FURTHER ORDERED that:
19. Defendants, and their officers, agents, servants, employees, and attorneys and all other Persons in active concert or participation with any of them who receive actual notice of this Order, whether acting directly or indirectly, may not: a. disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendants obtained before the Effective Date in connection with any Debt- Relief Service; b. attempt to collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who purchased or agreed to purchase a Debt-Relief Service Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 4 of 14
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from Corporate Defendant.
However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order.
III Order to Pay Redress IT IS FURTHER ORDERED that:
20. A judgment for monetary relief is entered in favor of the Bureau and against Defendants, jointly and severally, in the amount of $3,784,360 for the purpose of providing redress to Affected Consumers; however, full payment of this judgment will be suspended upon satisfaction of the obligations in Paragraph 21 of this Section and Paragraphs 34-38 and 40 of Section VI and subject to Section IV of this Order.
21. Within 10 days of the Effective Date, Defendants must pay to the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, the following amounts, in partial satisfaction of the judgment as ordered in Paragraph 20 of this Section:
a. Corporate Defendant must pay $5,000;
b. Individual Defendant Mark Nagler must pay $7,000;
c. Individual Defendant Casey Gassaway must pay $10,000. 22. With regard to any redress that Defendants pay under this Section, if Defendants receive, directly or indirectly, any reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, or if Defendants secure a tax deduction or tax credit with regard to any federal, state, or local tax, Defendants must: (a) immediately notify the Enforcement Director in writing, and (b) within 10 days of receiving the funds or monetary benefit, Defendants must transfer to the Bureau the full amount of such funds or monetary benefit (Additional Payment) to the Bureau or to the Bureau’s agent according to the Bureau’s wiring instructions. After the Bureau receives the Additional Payment, the amount of the suspended judgment referenced in Paragraph 20 will be reduced by the amount of the Additional Payment and the Additional Payment will be applied toward satisfaction of the monetary judgment entered in Paragraph 20. 23. Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or the Bureau’s agent according to applicable Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 5 of 14
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statutes and regulations to be used for redress for injured consumers, including, but not limited to, refund of moneys, restitution, damages or other monetary relief, and for any attendant expenses for the administration of any such redress. 24. 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 as disgorgement. Defendants will have no right to challenge the Bureau’s choice of remedies under this Section, and will have no right to contest the manner of distribution chosen by the Bureau.
25. Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. IV Effect of Misrepresentation or Omission Regarding Financial Condition IT IS FURTHER ORDERED that:
26. The suspension of the monetary judgment entered in Section III of this Order is expressly premised on the truthfulness, accuracy, and completeness of Defendants’ financial statements and supporting documents submitted to the Bureau, as follows, which Defendants assert are truthful, accurate, and complete, and which include: a. The Financial Statement of Corporate Defendant signed on May 14, 2020 and submitted to the Bureau on and about May 18, 2020; b. The Financial Statement of Individual Defendant Mark Nagler signed on May 14, 2020 and submitted to the Bureau on and about May 18, 2020; c. The Declaration of Individual Defendant Mark Nagler signed on June 24, 2020 and submitted to the Bureau on and about June 26, 2020; d. The Financial Statement of Individual Defendant Timothy Lenihan signed on May 31, 2020 and submitted to the Bureau on and about June 1, 2020; Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 6 of 14
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e. The Declaration of Individual Defendant Timothy Lenihan signed on June 26, 2020 and submitted to the Bureau on and about June 26, 2020; f. The Financial Statement of Individual Defendant Casey Gassaway signed on May 12, 2020 and submitted to the Bureau on and about May 20, 2020; and g. The Declaration of Individual Defendant Casey Gassaway signed on June 24, 2020 and submitted to the Bureau on and about June 26, 2020. 27. If upon motion by the Bureau, the Court determines that any Defendant has failed to disclose any material asset or that any of his financial statements or oral testimony contain any material misrepresentation or omission, including materially misstating the value of any asset, the Court shall terminate the suspension of the monetary judgment entered in Section III and without further adjudication, shall reinstate the judgment entered in Section III of this Order and the full judgment set forth in that Section with respect to that Defendant shall be immediately due and payable, less any amounts paid to the Bureau under Section III of this Order. 28. If the Court terminates the suspension of the monetary judgment under this Section, the Bureau will be entitled to interest on the judgment, computed from the date of entry of this Order, at the rate prescribed by 28 U.S.C. § 1961, as amended, on any outstanding amounts not paid.
29. Provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to, and not in lieu of any other civil or criminal remedies as may be provided by law, including any other proceedings that the Bureau may initiate to enforce this Order.
V Order to Pay Civil Money Penalty IT IS FURTHER ORDERED that:
30. Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint and taking into account the factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil money penalty is entered in favor of the Bureau and against each Defendant, in the amount of $1. This amount is based on each Defendant’s limited ability to pay as attested to in his financial statements listed in Section IV above. Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 7 of 14
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31. Within 10 days of the Effective Date, each Defendant must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
32. The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 33. Defendants must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Defendants may not:
a. claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b. seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. Individual Defendants agree that the civil penalty imposed by the Order represents a civil penalty owed to the United States Government, is not compensation for actual pecuniary loss, and, thus, as to Individual Defendants, it is not subject to discharge under the Bankruptcy Code under 11 U.S.C. § 523(a)(7).
VI Additional Monetary Provisions IT IS FURTHER ORDERED that:
34. In the event of any default on Defendants’ obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable.
35. Defendants relinquish all dominion, control, and title to the funds paid under this Order to the fullest extent permitted by law and no part of the funds may be returned to Defendants.
36. The facts alleged in the Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by or on behalf of the Bureau, including in a proceeding to Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 8 of 14
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enforce its rights to any payment or monetary judgment under this Order, such as a nondischargeability complaint in any bankruptcy case.
37. The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau under Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and for such purposes this Order will have collateral estoppel effect against each Defendant, even in such Defendant’s capacity as debtor-in-possession. 38. Under 31 U.S.C. § 7701, Defendants, unless they already have done so, must furnish to the Bureau their taxpayer-identification numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 39. Within 30 days of the entry of a final judgment, Order, or settlement in a Related Consumer Action, Defendants must notify the Enforcement Director of the final judgment, Order, or settlement in writing. That notification must indicate the amount of redress, if any, that Defendants paid or are required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Defendants may not argue that Defendants are entitled to, nor may Defendants benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund. If the court in any Related Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against Defendants based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, Defendants must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau and pay the amount of the offset or reduction to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action. 40. Upon written request, any consumer reporting agency must furnish consumer reports to the Bureau concerning any Individual Defendant under Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 168l b(a)(1), which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
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COMPLIANCE PROVISIONS VII Reporting Requirements IT IS FURTHER ORDERED that:
41. Defendants must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendants; or a change in any Defendant’s name or address. Defendants must provide this notice at least 30 days before the development or as soon as practicable after the learning about the development, whichever is sooner.
42. Within 7 days of the Effective Date, each Defendant must: a. designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with such Defendant;
b. identify all businesses for which such Defendant is the majority owner, or that Defendant directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; c. describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales; d. identify such Individual Defendant’s telephone numbers and all email, Internet, physical, and postal addresses, including all residences; e. describe in detail such Individual Defendant’s involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including such Individual Defendant’s title, role, responsibilities, participation, authority, control, and ownership.
43. Defendants must report any change in the information required to be submitted under Paragraph 44 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner.
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44. Within 90 days of the Effective Date, and again one year after the Effective Date, each Defendant must submit to the Enforcement Director an accurate written compliance progress report sworn to under penalty of perjury (Compliance Report), which, at a minimum: a. lists each applicable paragraph and subparagraph of the Order and describes in detail the manner and form in which such Defendant has complied with each such paragraph and subparagraph of this Order; and b. attaches a copy of each Order Acknowledgment obtained under Section VII, unless previously submitted to the Bureau.
VIII Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:
45. Within 7 days of the Effective Date, each Defendant must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury. 46. Within 30 days of the Effective Date, Corporate Defendant, and each Individual Defendant, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of this Order to each of its board members and executive officers, as well as to any managers, employees, service providers, or other agents and representatives who have responsibilities related to the subject matter of the Order. 47. For 5 years from the Effective Date, Corporate Defendant, and each Individual Defendant, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of this Order to any business entity resulting from any change in structure referred to in Section VII, any future board members and executive officers as well as to any managers, 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.
48. Each Defendant must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, U.S.C.
§ et Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 11 of 14
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seq., within 30 days of delivery, from all persons receiving a copy of this Order under this Section.
IX Recordkeeping IT IS FURTHER ORDERED that:
49. Defendants must create, for at least 10 years from the Effective Date, the following business records, including for any business for which Individual Defendants, individually or collectively with any other Defendant, is a majority owner or which he directly or indirectly controls: all documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. Defendants must retain these documents for at least 10 years after creation and make them available to the Bureau upon the Bureau’s request. 50. Corporate Defendant must maintain, for at least 5 years from the Effective Date or 5 years after creation, whichever is longer:
a. for each individual Affected Consumer and his or her enrollment in a Debt-Relief Service: the consumer’s name, address, phone number, email address; amount paid, description of the Debt-Relief Service purchased, the date on which the Debt-Relief Service was purchased and, if applicable, the date and reason consumer left the program;
b. accounting records showing the gross and net revenues generated by any Debt-Relief Service;
c. any and all documentation required to complete the Bureau’s individual and corporate financial disclosure forms; and d. all consumer complaints and refund requests (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests.
Corporate Defendant must make these materials available to the Bureau upon the Bureau’s request.
51. Individual Defendants must maintain, for at least 5 years from the Effective Date or 5 years after creation, whichever is longer, financial records, including, but not limited to, individual and corporate tax returns, credit reports, any and all documentation required to complete the Bureau’s individual and corporate financial disclosure forms, and accounting records showing Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 12 of 14
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gross and net revenues, all costs incurred in generating revenues, and the resulting net profit or loss. Individual Defendants must make these materials available to the Bureau upon the Bureau’s request.
X Notices IT IS FURTHER ORDERED that:
52. Unless otherwise directed in writing by the Bureau, Defendants must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “CFPB v. Timemark Solutions Inc., et al., Case No. 9:20-CV-81057” and send them by overnight courier or first-class mail to the below address and contemporaneously by email to [email protected]:
Assistant Director for Enforcement Bureau of Consumer Financial Protection ATTENTION:
Office of Enforcement 1700 G Street, N.W.
Washington D.C. 20552
XI Cooperation with the Bureau IT IS FURTHER ORDERED that:
53. Defendants must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau.
XII Compliance Monitoring IT IS FURTHER ORDERED that to monitor Defendants’ compliance with this Order, including the financial representations upon which the monetary judgment was partially suspended: 54. Within 14 days of receipt of a written request from the Bureau, Defendants must submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; provide sworn testimony; or produce documents. 55. For purposes of this Section, the Bureau may communicate directly with Defendants, Case 9:20-cv-81057-RS Document 6 Entered on FLSD Docket 08/12/2020 Page 13 of 14
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unless Defendants retain counsel related to these communications. 56. Defendants must permit Bureau representatives to interview any employee or other person affiliated with Defendants who has agreed to such an interview. The person interviewed may have counsel present.
57. Nothing in this Order will limit the Bureau’s lawful use of compulsory process, under 12 C.F.R. § 1080.6.
XIII Retention of Jurisdiction IT IS FURTHER ORDERED that:
58. The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
IT IS FURTHER ORDERED that:
XIV Service 59. This Order may be served upon Defendants by electronic mail, certified mail, or United Parcel Service, either by the United States Marshal, the Clerk of the Court, or any representative or agent of the Bureau.
DONE AND ORDERED in Fort Lauderdale, Florida, this 12th day of August, 2020.
Copies provided to: Counsel of Record
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