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This story originally appeared on PressDemocrat.com.

SAN FRANCISCO — A Sebastopol man accused of engineering a wide-ranging scheme to defraud student loan borrowers of at least $28 million provided his first public defense Monday in the criminal case against him at a hearing before a federal judge.

Wearing orange and yellow jail garb, Brandon Frere, 41, stood quietly as his attorney told U.S. Magistrate Judge Sallie Kim that a number of recent bank transfers by Frere may have seemed suspicious to investigators but were routine business transactions, including payments to an attorney and about $400,000 for state and federal tax payments.

Frere made the transfers from his business to personal bank accounts on Nov. 29, about 45 minutes before another federal judge in Oakland stripped him of control of his Rohnert Park student loan debt relief company, Ameritech Financial, and two sister firms he ran as CEO. The daily operations of the companies were placed in the hands of an outside manager.

Frere was arrested Wednesday night by federal agents at San Francisco International Airport as he tried to board a plane to Mexico. The trip to Cancun was merely a romantic weekend getaway, his bag packed with T-shirts, shorts and wine, his attorney Ed Swanson said Monday in court.

“What did he do with the money? He paid his lawyer,” said Swanson, referring to another lawyer representing Frere. “That’s not something people trying to flee ever do.”

The Sonoma County native was charged Thursday in U.S. District Court in San Francisco on suspicion of wire fraud, becoming the first person to face a criminal charge as part of a two-year federal crackdown by the Federal Trade Commission on student loan debt relief companies.

The FTC in February sued Frere and his companies — Ameritech, Financial Education Benefits Center and American Financial Benefits Center — in a civil lawsuit, alleging they deceived tens of thousands of student loan borrowers into paying as much as $60 million in fees and other charges for loan debt relief services they never received. Instead, customers struggling to repay student loans found themselves in worse financial conditions, FTC officials said.

The separate 24-page criminal complaint prosecutors filed Dec. 5 accused Frere of using his companies to defraud the student loan borrowers in order to enrich himself and his family between 2014 and November 2018.

On Monday, attorneys for Frere and the government argued in a San Francisco federal courtroom over whether Frere should be released from jail on bail or remain in custody to prevent him from fleeing the country.

Assistant U.S. Attorney Scott Joiner argued Frere has the motive and money to flee. In court filings, prosecutors said Frere siphoned at least $9 million from his companies to personal bank accounts in Andorra and Luxembourg between June 2015 and April 2018. In court, Joiner said a flurry of other bank transfers from his business to personal and family accounts while the FTC’s civil case against him advanced demonstrated Frere “had an asset protection plan.”

“He had a plan to follow his money overseas,” Joiner said.

Defense attorney Swanson argued Frere was not a flight risk because of his family connections in Sonoma County, where he lives on the same Morelli Lane property in Sebastopol as his parents and other family members and has an 11-year-old son in Petaluma.

This story originally appeared on PressDemocrat.com.

Kim allowed Frere to be released Monday on $3 million bail after Frere’s family agreed to post two properties in Sebastopol and San Francisco as collateral on the bond. She ordered Frere to be confined to his parents’ home and monitored with an electronic bracelet. He also had to surrender his passport.

“The transactions overseas are extremely suspicious,” Kim said. “It could be completely innocent, but I am very, very concerned about flight risk.”

Prosecutors in the criminal case said Frere engaged in “a pattern of transferring large sums overseas” just before significant hearings in the FTC’s civil case against him, according to an 8-page memo opposing his release from custody.

In November, Frere’s withdrawals from business accounts triggered immediate suspicion from federal investigators conducting a criminal investigation running parallel to the FTC’s investigation and lawsuit.

Federal prosecutors said a court-appointed manager, known as a receiver, now in charge of Frere’s businesses has filed a motion “to hold Frere in civil contempt for looting the companies, noting that, ‘at the same time he was transferring hundreds of thousands of dollars for his benefit, Defendant Frere made no provision to pay his employees their outstanding pre-receivership wages, which for two weeks of work totaled roughly $175,000.’ ”

Frere founded his main company Ameritech in 2015, operating out of a nondescript office park on State Farm Drive in Rohnert Park. At one point, the company employed between 200 and 300 people in Sonoma County and at another office near Sacramento. A former employee told The Press Democrat Friday that the court-appointed manager shuttered Ameritech’s operations a week ago.

Some former employees have assisted the FTC in its investigation, providing sworn written statements describing Frere as living a “lavish” lifestyle and running a “soul crushing” workplace with staff under the gun to make sales quotas or be fired. Former employees said the companies specialized in targeting vulnerable student loan borrowers, offering to sign them up for federal programs that provide debt relief. The FTC claimed the company charged customers steep enrollment and other fees and paid little to nothing to reduce their loans.

In court Monday, Swanson characterized the case as a dispute between Frere and the government over how Frere “handles his money.” He said Frere was acting in good faith to continue managing his businesses while the FTC’s civil matter proceeded. Swanson further described the money transfers as “innocent” and occurring “within sight of the receivership,” prompting the judge to interrupt him.

“Outside the jurisdiction of the United States,” Kim said, apparently referring to Frere’s personal bank accounts in Luxembourg and Andorra.

Outside court Monday, Swanson said his client’s actions are defensible, although he declined to elaborate and said it all would be revealed as the case proceeds. Frere’s parents and other relatives attended the court hearing, but referred all questions from a reporter afterward to Frere’s attorney. Frere’s next court appearance is scheduled for Dec. 21.

“We are looking forward to the entire story coming out in court,” Swanson said.

You can reach Staff Writer Julie Johnson at 707-521-5220 or julie.johnson@pressdemocrat.com.