NEW YORK – New York Attorney General Letitia James has announced a settlement that stops fraudulent student debt relief practices by a ring of five New York-based defendants.
“The settlement provides a measure of financial relief to deceived New York student loan borrowers, as New Yorkers and individuals across the nation continue to suffer from the economic fallout of the coronavirus disease 2019 public health crisis,” the AG’s office stated.
Stemming from a lawsuit originally filed in September 2018, James filed a proposed consent judgment for $5.5 million against three New York-based student loan debt relief companies — Debt Resolve, Inc.; Student Loan Care, LLC; and Progress Advocates, LLC — and two of the companies’ executive officers, Bruce Bellmare and Stanley Freimuth — for their part in running a student loan debt relief scam that cheated thousands of New York student loan borrowers out of millions of dollars.
“As New Yorkers continue to struggle financially because of the coronavirus, my office will continue do everything in its power to provide student loan borrowers the support they need and return money to their pockets,” said James. “We are not only stopping these companies from taking advantage of individuals with false promises of debt relief, but have reached a settlement that provides some monetary relief to eligible borrowers and ensures that no borrower is liable for additional payments to these scammers. My office remains committed to making sure these companies can no longer illegally profit off of those struggling to pay their mounting student loan debt.”
Lawsuits Filed
In September 2018, the Office of the Attorney General sued these five New York-based defendants as a part of a larger ring of 10 companies and two individuals charged with tricking student loan borrowers into paying over
As part of the settlement — which is subject to court approval — the New York defendants will be required to pay $250,000 of the $5.5 million total judgment to New York State, due to their limited ability to pay.
Additionally, James has permanently banned Debt Resolve, Student Loan Care, and Progress Advocates, as well as individuals Bellmare and Freimuth from engaging in any debt relief business of any kind in the future, anywhere in the country.