The head of a well-known alleged student loan debt relief scam is now being forced to account for his actions. Brandon Frere, the CEO of Ameritech and two other companies is accused of engaging in scams in the student debt relief business. He was arrested last week at the San Francisco International Airport.
When he was arrested, he was on his way to Cancun, Mexico, and had $3,900 cash on him, as well as five blank checks from his business, two blank checks from his personal bank account, 10 credit cards, gift cards and his Social Security card.
The claims against Frere are numerous. He is accused of withdrawing money that the company was holding in escrow for its customers, meaning the money belonged to the customers and not to the company. He is also accused of transferring millions of dollars from the company into his personal account and spending this money on cars, travel and other luxury items.
Days before Frere tried to leave the country, a judge granted a motion for preliminary injunction filed by the Federal Trade Commission (FTC). The same day that Frere booked his Cancun ticket, he withdrew $400,000 from accounts that were associated with his companies. Of that amount, $179,000 was transferred to his personal account. The remainder was transferred to family members and lawyers. Prosecutors estimate that Frere’s companies collected somewhere up to $28 million from student loan borrowers over four years.
It is estimated that student loan debt is a staggering $1.5 trillion, held by 44 million borrowers. It is also estimated that somewhere around 40 percent of all student loan borrowers will default on their obligations at some point in time.
These types of scams are not unique. In fact, many of these companies exist, taking advantage of student loan borrowers who are in an extremely difficult situation and are desperate for relief. It is extremely important that a student loan borrower does his or her research before choosing a repayment plan or relief option. Many times, borrowers make simple mistakes, like trusting a company they should not otherwise trust, that only hurts them in the end.
Once they had the borrower’s money, the company would continue to charge the borrowers monthly fees, ranging from $49 to $99. The borrowers were under the impression that the company was making their payments to their loans, but these payments were not being made, leaving these accounts unpaid and in default.
Another illegal practice that Frere and others were accused of was encouraging their company representatives to push customers to exaggerate the size of their families to receive more favorable student loan terms.
The FTC and various state attorneys general have been hard at work on cracking down on these types of scams and illegal collection practices. The FTC claimed that Ameritech would lure student loan borrowers with mailings promising the borrowers that they were prequalified for debt-relief. The company collected fees ranging between $600 to $800 to prepare and submit documents on behalf of the borrowers who were interested in government repayment and forgiveness programs. The problem with this is that there are free services provided by the U.S. Dept. of Education that offer the same.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.