FTC settles civil charges against Sebastopol financier behind student loan scheme

The Federal Trade Commission settled civil charges against a Sebastopol man who orchestrated a scheme that defrauded about 40,000 student loan borrowers of tens of millions of dollars, the agency said Thursday.

The order, signed by U.S. District Judge Saundra Brown Armstrong in Oakland on Tuesday, permanently bans Brandon Frere, 43, and his Rohnert Park companies from providing debt relief services of any kind and prohibits them from violating federal telemarketing regulations.

Frere also must pay at least $324,749 in state and federal tax refunds to the FTC, according to the order.

In its February 2018 complaint against Frere, the FTC alleged he and his companies charged borrowers hundreds of dollars in illegal upfront fees to enroll them in a federal student loan assistance program. They also billed consumers up to $1,200 for a “financial education” program, followed by additional monthly payments for the entirety of their student loan, typically lasting 10 years to 25 years.

In July in a San Francisco federal court, Frere was sentenced to 42 months in federal prison after pleading guilty to wire fraud and money laundering criminal charges in connection with the scheme.

Frere admitted in his plea agreement to defrauding borrowers of $25 million to $65 million between January 2014 and November 2018, according to the U.S. Attorney’s Office. A hearing is set for Dec. 18 in the criminal case in San Francisco to determine how much restitution Frere must pay to the borrowers he defrauded.

His criminal defense attorney, Ed Swanson, did not reply to a phone message left for him on Thursday.

Frere had owned and operated three Rohnert Park-based financial services companies — Ameritech Financial, American Financial Benefits Center and the Financial Education Benefits Center — that sold “document preparation services” for those applying for federal student loan forgiveness, loan consolidation or reduced-payment programs.

Frere instructed his employees to use deceptive sales tactics to sign up customers for the additional financial service programs without their knowledge, and to mislead borrowers about the companies’ ability to reduce their student loan payments, according to prosecutors.

To conceal the money made from the scheme, Frere transferred funds to overseas bank accounts starting in 2015. He continued doing so in August 2017, after he became involved in litigation with the FTC and worried the commission or a court might seize money from his businesses, according to prosecutors.

Federal agents arrested Frere on Dec. 5, 2018, at San Francisco International Airport as he was attempting to board a flight to Cancun, Mexico, and was formally charged Oct. 1, 2019, with crimes connected with the student loan scheme.

You can reach Staff Writer Ethan Varian at or 707-521-5412. On Twitter @ethanvarian

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