GST Factoring, Inc., et al.
On July 13, 2020, the Bureau filed a complaint in the federal district court for the Central District of California against GST Factoring, Inc., which runs a student-loan debt-relief business in Texas, and two of its owners, Rick Graff and Gregory Trimarche, as well as Champion Marketing Solutions, LLC, a customer service and marketing company, and its owner, Scott Freda. The Bureau also filed suit against four attorneys, California attorneys Amanda Johanson and Jacob Slaughter, Arizona attorney David Mize, and Florida attorney Daniel Ruggiero. The Bureau alleges that the companies, their owners, and the attorneys were part of a nationwide student-loan debt-relief operation that charged thousands of consumers saddled with private student-loan debt approximately $11.8 million in illegal upfront fees in violation of the Telemarketing Sales Rule (TSR).
Concurrent with the complaint, the Bureau and four of the defendants filed proposed stipulated final judgments and orders to resolve the claims against them. If entered by the court, the proposed orders will permanently ban Trimarche, from providing debt-relief services and telemarketing any consumer financial product or service, and impose permanent debt-relief bans on Slaughter, Mize, and Ruggiero. The proposed orders would also collectively impose an approximate $11.8 million monetary judgment against the settling defendants for consumer redress, full payment of which will be suspended upon the settling defendants’ paying a portion of the redress based on their demonstrated inability to pay the full amount of judgment in each order. Each settling defendant will also pay a $1 civil money penalty to the Bureau.
The Bureau’s lawsuit against Defendants GST Factoring, Champion Marketing Solutions, Graff, Freda, and Johanson will proceed. The complaint seeks redress to consumers, an injunction, and the imposition of civil money penalties against them.