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Other Federal Enforcement Actions

Numerous federal agencies have authority to institute enforcement proceedings against wrongdoers.  These agencies include:

  • The Department of the Treasury and its divisions including the Financial Crimes Enforcement Network (FINCEN), which is responsible for safeguarding the U.S. financial system from illicit use and money laundering including through enforcement of the Bank Secrecy Act, and the Office of Foreign Assets Control (OFAC), which enforces economic and trade sanctions. Whistleblowers with knowledge of violations of the Bank Secrecy Act can submit a claim under the Anti-Money Laundering Whistleblower Program.  Violations of other laws enforced by the Department of Treasury may give rise to claims under different whistleblower reward programs.
  • The Federal Trade Commission (FTC), which is charged with preventing anticompetitive, deceptive, and unfair business practices. The FTC can bring enforcement actions under U.S. antitrust laws and to stop unfair, deceptive and fraudulent business practices. The FTC does not have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the FTC may also give rise to a claim under a different whistleblower reward program.
  • The Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which regulates the offering and provision of consumer financial products or services under the federal consumer financial laws, and has the authority to bring enforcement actions against financial service providers. While the CFPB accepts tips from whistleblowers, and applicable laws offer whistleblowers protection from retaliation, there is currently no provision for CFPB whistleblowers to receive financial rewards. However, conduct that is regulated by the CFPB may also give rise to a claim under a different whistleblower reward program.
  • The Environmental Protection Agency, which enforces federal environmental laws and regulations. The EPA does not currently have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the EPA may also give rise to a claim under a different whistleblower reward program, and a number of federal environmental laws protect government or private employees reporting environmental violations under the statutes from retaliation.

Below are summaries of recent settlements and successful enforcement actions involving these agencies. If you believe you have information about fraud which could give rise to a claim under a whistleblower reward program, please contact us to speak with one of our experienced whistleblower attorneys.

October 18, 2023

For-profit Sollers College, its parent company, Sollers Inc., and its founder and president Siba Padhi have been ordered to cancel $3.4 million in student debt and pay $1.2 million in civil penalties for misrepresenting its job placements rates and relationships with prominent companies in order to lure students to the school.  Since 2018, Sollers claimed that 90% of its graduates were placed in jobs within 3 months of graduation, when in reality the number was as low as 52%.  Sollers also encouraged students into paying tuition with illegal income-sharing agreements, wherein students would pay the school a fixed percentage of their future income for about two years.  Nearly 400 students nationwide were affected by this misconduct, with more than 60 of them being residents of New Jersey.  NJ AG; FTC

October 17, 2023

Fintech company Chime Inc., d/b/a Sendwave, has been ordered to pay $1.5 million in fees and a $1.5 million penalty to the CFPB’s victim relief fund for violations of the CFPB’s Remittance Transfer Rule and the Electronic Fund Transfer Act.  According to the agency, Chime deceived consumers about the speed and cost of remittance transfers on its mobile app, forced consumers to waive their legal rights, failed to provide consumers with required disclosures or timely receipts, and failed to properly track, investigate, and resolve consumer disputes and errors.  CFPB

October 12, 2023

Trans Union LLC and its subsidiary, TransUnion Rental Screening Solutions, Inc. (TURSS), have agreed to pay $15 million to settle charges of violating the Fair Credit Reporting Act (FCRA) by failing to ensure the accuracy of information included in tenant background screening reports, thus hampering the ability of consumers to obtain housing.  Some of the failures included reporting developments in the same eviction proceeding as if they were from more than one eviction, mischaracterizing the nature of certain information, and failing to accurately report eviction outcomes.  CFPB; FTC

October 6, 2023

Two groups of student loan debt relief scammers—SL Finance LLC and owners Michael and Christian Castillo, along with BCO Consulting Services and SLA Consulting Services Inc and owners Gianni Olilang, Brandon Clores, Kishan Bhakta, and Allan Radam—have been ordered to pay a partially suspended $5.8 million each and be permanently banned from the industry.  The defendants pretended to be affiliated with the Department of Education and used their fake position to charge students millions in junk fees through nonexistent loan repayment and forgiveness programs.  FTC

September 11, 2023

Tempoe, LLC has agreed to pay $35 million to 41 states, the District of Columbia, and the CFPB, after an investigation found the Ohio-based consumer finance company misled customers who sought financing at major retailers into believing they were signing up for an installment plan, when in fact they were being locked into expensive leasing agreements with unreasonable return policies.  Tempoe ultimately caused many customers to pay double or triple the original purchase price.  In addition to the monetary penalty, the company has been ordered to release customers from existing lease agreements and be banned from engaging in future leasing activities.  CFPB; DE AG; GA AG; VA AG

September 11, 2023

Background report providers Truthfinder and Instant Checkmate have been ordered to pay $5.8 million to settle charges of violating the Fair Credit Reporting Act by failing to ensure the maximum possible accuracy of their reports.  The companies were found to falsely describe certain records as criminal when in fact they were traffic tickets.  When consumers flagged information as inaccurate, the companies never investigated the information flagged, modified the reports, nor noted in reports that information had been flagged by others.  FTC

August 28, 2023

Roomster and owners John Shriber and Roman Zaks have been ordered to pay $36.2 million in monetary judgment and $10.9 million in civil penalties to resolve allegations of charging consumers for access to fake listings for available housing.  Additionally, Roomster was found to have bought tens of thousands of fake reviews which it used to populate the listings.  Per settlement terms, the required payments are suspended upon payment of $1.6 million to New York, California, Colorado, Florida, Illinois, and Massachusetts, which led the investigation along with the FTC.  FTC

August 28, 2023

Some of the largest credit repair brands in the country, including CreditRepair.com and Lexington Law, have been banned from offering telemarketing credit repair services for 10 years to settle charges of using telemarketers to collect illegal advance fees for their services, in violation of the federal Telemarketing Sale Rule.  The companies have also been ordered to pay $2.7 billion in restitution, and two entities, Progrexion Marketing and Health law firm, will pay $64 million in civil penalties.  CFPB

July 14, 2023

Online counseling service BetterHelp has been ordered to pay $7.8 million, refrain from disclosing private client health data for advertising purposes, and obtain affirmative consent from clients disclosing such information again, following a settlement with the FTC.  The company was previously found to disclose its clients’ email addresses, IP addresses, and health questionnaire information to various advertisers, in direct contradiction to its promises to clients that such information would be disclosed for select purposes only.  FTC

July 13, 2023

Cryptocurrency platform Celsius Network has been banned from handling consumer assets and ordered to pay a $4.7 billion judgment, suspended pending the return of remaining assets to consumers in ongoing bankruptcy proceedings.  Before filing for bankruptcy in July 2022, Celsius marketed the platform as a safe place to deposit cryptocurrency and made various representations to build consumer confidence, including promises that consumers could withdraw deposits at any time, that deposits were insured by a $750 million policy, that sufficient reserves were on hand, and that deposits could earn as high as 18% APY.  However, all of those claims were all false, and in fact, Celsius misappropriated $4 billion in deposits, using them to fund operations, reward other consumers, and make high-risk investments that often lost money.  FTC; SEC
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