WASHINGTON — The Consumer Financial Protection Bureau (CFPB) and seven state attorneys general have sued Strategic Financial Solutions (SFS) and its web of “shell” companies for running an allegedly illegal debt-relief enterprise, saying the companies “swindled” more than $100 million from financially struggling families.
In addition, the CFPB and state attorneys general also sued two people they called the chief architects of the illegal enterprise,” Ryan Sasson and Jason Blust.
The CFPB and attorneys general allege the enterprise has collected hundreds of millions of dollars in exorbitant, illegal fees from vulnerable consumers. The CFPB and attorneys general filed the suit under seal on Jan. 10, 2024, and are requesting the court to order a stop to the enterprise’s illegal actions, order redress for consumers, and impose a civil money penalty.
The seven states joining with the CFPB are Colorado, Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin.
Strategic Financial Solutions markets itself as providing debt relief services. It has offices in New York City and Buffalo, New York. Ryan Sasson is the chief executive officer of SFS. SFS sits at the top of a web of shell companies and façade law firms, which are controlled by Sasson and fellow scheme architect Jason Blust.
How it Works
According to the government, SFS runs an alleged scheme involving dozens of entities to dupe consumers and regulators.
“The company uses third parties to target financially vulnerable consumers with advertisements,” the CFPB and the AGs said. “The advertisements lead consumers to believe they may qualify for loans to help pay down debts. SFS employees then discuss these loans with consumers over the phone. Though SFS tells most, if not all, consumers that they do not qualify for the advertised loans, SFS encourages consumers to enroll in its debt-relief services. SFS promises that its network of law firms and lawyers will negotiate lower debt amounts.
“SFS provides little, if any, debt-relief services. SFS requires customers to make immediate payments into an escrow account,” the CFPB and the AGs continued. “Long before it settles any debts, however, SFS collects the fees from the escrow account. While the illegal fees and false claims of legal assistance leave consumers worse off, Sasson and Blust pad their pockets through their web of shell companies that siphon the fees from the escrow accounts.”
The CFPB and seven state attorneys general are alleging the actions of SFS violate the Telemarketing Sales Rule. The lawsuit also alleges violations of New York and Wisconsin state laws.
The Specifics
Specifically, the complaint alleges that SFS harms consumers by:
- Charging illegal advance fees. “SFS charges and collects fees before any of a consumer’s debts have been settled. SFS charges pre-determined fee amounts without any connection to actual settlements or debt-relief savings. Since 2016, SFS and its façade firms have collected over $100 million from consumers before any debt-relief payments to these consumers’ creditors.”
- Falsely claiming lawyers will provide debt relief. “SFS leads consumers to think that contracted law firms will negotiate lower payoff amounts. However, the firms serve as a façade, and SFS and its employees, who are not lawyers, conduct the debt-relief negotiations, if any take place.”
Enforcement Action
The lawsuit seeks to stop SFS’s alleged unlawful conduct, require SFS to make harmed consumers whole, and require SFS to pay a civil money penalty, which would be deposited in the CFPB’s victims relief fund.