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.