Access Funding, LLC; Access Holding, LLC; Reliance Funding, LLC; Lee Jundanian; Raffi Boghosian; Michael Borkowski; and Charles Smith
On November 21, 2016, the Bureau filed a complaint against Access Funding, LLC, Access Holding, LLC, Reliance Funding, LLC, three of the companies’ principals—Lee Jundanian, Raffi Boghosian, and Michael Borkowski—and a Maryland attorney, Charles Smith. The Bureau alleged that Access Funding was aware that the individuals from whom they purchased structured settlement payments were financially unsophisticated and in need of the funds the company could supply. The Bureau also alleged that the companies and their principals steered consumers to receive “independent advice” from Smith, who was paid directly by Access Funding and only provided cursory communications to consumers. The Bureau alleged that Smith’s conduct was unfair, abusive, and deceptive in violation of the Consumer Financial Protection Act of 2010 and that Access Funding and its leadership unlawfully aided Smith’s illegal conduct and engaged in abusive conduct. The Bureau further alleged that Access Funding engaged in abusive conduct by advancing money to some consumers and represented to those consumers that the advances obligated them to go forward with transactions even if they realized that the transactions were not in their best interests. On September 13, 2017, the court granted defendants’ motions to dismiss counts I–IV, arising out of Smith’s conduct, on the grounds that he had attorney-client relationships with the consumers in question. The court denied the defendants’ motions to dismiss the Bureau’s claim relating to the advances Access Funding offered consumers. The court granted the Bureau’s motion to file an amended complaint alleging Smith did not have attorney-client relationships with the consumers in question. Defendants again filed motions to dismiss, which the court denied. The defendants filed a motion for partial summary judgment, which the court denied on January 18, 2019. On December 26, 2019, the court stayed the case pending the Supreme Court’s decision in Seila Law LLC v. CFPB, No. 19-7 (cert. granted Oct. 18, 2019). On October 23, 2020, based on the parties’ stipulation, the court dismissed the claims against Reliance Funding, LLC. The parties moved for summary judgment, which the Court denied on July 12, 2021.
On November 18, 2021, the court entered a stipulated judgment and order against Charles Smith, which requires him to pay $40,000 in disgorgement and a $10,000 civil money penalty. The order also permanently bans him from the structured-settlement industry. On December 17, 2021, the court entered a stipulated judgment and order against Access Funding, LLC, Access Holding, LLC, Lee Jundanian, and Raffi Boghosian, requiring the settling defendants to pay $40,000 in disgorgement and a $10,000 civil money penalty. On May 18, 2022, the court entered a consent order against Michael Borkowski requiring him to pay a $5,000 civil money penalty. The December 2021 and May 2022 orders also prohibit the settling defendants from referring consumers to a specific individual or for-profit entity for advice concerning any structured-settlement transaction or taking unreasonable advantage of consumers’ lack of understanding of the material risks, costs, or conditions of any cash advance. The orders also prohibit the settling defendants from misrepresenting the relationship between themselves and providers of independent professional advice, and any other fact material to consumers (such as the material risks, total costs, or conditions of any Advance) in connection with the transfer of payment streams from structured-settlement holders.