Rumors have been circulating for the past couple of weeks of action against Jeremy Marcus and his debt relief empire. The documents have been unsealed and it looks as if the Federal Trade Commission and the State of Florida have spared no effort to shutdown the Marcus empire. To see the history of stories I’ve written on Marcus and his efforts, click here.
The FTC suite filed under seal so it was not public at first, names a number of defendants and involved entities. The court action includes Jeremy Marcus, Jeremy Lee Marcus, Craig Smith, Craig Davis Smith, Yisbet Segrea, Financial Freedom National, Institute for Financial Freedom, Marine Career Institute Sea Frontiers, 321 Loans, Instahelp America, Helping America Group, United Financial Support, Breeze Financial Solutions, 321Financial Education Credit Health Plan, Credit Specialists of America, American Advocacy Alliance, Associated Administrative Services, 321Loans, 321Financial, Helping America Team, Credit Health Plan, Credit Maximizing Program, US Legal Club, Active Debt Solutions, Guardian Legal Group, American Credit Security, American Credit Shield, Paralegal Support Group, ParalegalStaff Support, Associated Administrative Services, Jobfax, Jlmjp Pompano, 1609 Belmont Place, 16 S H Street Lake Worth, 17866 Lake Azure Way Boca, 114 Southwest 2nd Street DBF, 110 Glouchester St, 72 SE 6th Ave, Fast Pace 69, Strategic Acquisitions Two, Halfpay International, Halfpay NV, and Nantucket Cover of Illinois.
In my past writings on the enterprise and especially 321 Loans, I was perplexed exactly how their promise of a loan worked. The loans appeared to be nothing more than fake loans or loans of the fees owed the company.
Here is what the court documents say about the operation, “Defendants make their money either through promises of large debt consolidation loans at attractive rates, or through representations that they have taken over the servicing of consumers’ pre-existing debt relief accounts. In either instance, Defendants trick consumers into paying Defendants hundreds or thousands of dollars a month under the false pretense that Defendants will pay, settle, or obtain dismissals of consumers’ debts and improve consumers’ credit.”
As you can guess, the FTC and State of Florida have a different point of view about the effectiveness of the organizations. Including how the company promises of “assuming the debt” of the consumer, really worked out.
Previously an insider had told me, “Clients pay around 100-110% of their total debt amount to get this so called special purpose loan. They are not getting a consolidation to pay off their debts, like they are lead to believe from the sales team, but merely are getting a debt dispute and verification service.
Consumers could easily settle their own debts for around 50% of their total debt amount, but instead believe that their debts are getting paid off by Helping America Group, or as the employees called the company, Hurting America Group. They take advantage of military personnel by accepting accounts with military credit unions, which of course Helping America Group cannot do anything to dispute, and oftentimes these accounts are cross collateralized and the consumers are at risk of losing their cars, home, and security clearance by enrolling them in the program.”
Of course, like many of these debt relief schemes, the reality is much different than the sales pitch. The complaint states, “Defendants also tell consumers they will become part of a non-profit service that works to dismiss or settle the debts. Defendants tell consumers their purported non-profit status enables them to provide the loans at such low interest rates. In addition, Defendants tell consumers that, as a non-profit, they have legal teams of attorneys who will work to get consumers’ debts dismissed or settled, and a credit corrections group who will improve consumers’ credit.”
The legal documents also state the enterprise led consumer to believe they were taking over the debt settlement accounts of other companies.
“In Defendants’ account takeover campaign, Defendants call consumers already enrolled with third-party debt relief providers and inform them that Defendants are taking over the servicing of their debt relief accounts. M any of these consumers have worked for years with their third-party debt relief providers and have saved money in established escrow accounts for use in negotiating with creditors. Many consumers’ escrow balances are in the thousands.
Defendants falsely promise they will continue to perform the same or similar debt relief services for these consumers. They instructed consumers to transfer a11 the money from their escrow accounts to Defendants. In addition, Defendants set up recurring monthly withdrawals from the consumers’ checking accounts ranging from $200 to $1,000 or more.”
You can read the complaint below. But there are so many documents involved in this case it will take me a few days to weed through them. There is some very interesting documents to come so stay tuned.