OC Company Promised Student Loan Debt Relief Settles For $835K

ORANGE COUNTY, CA — Operators of a Santa Ana student loan debt relief scheme will pay at least $835,000 to settle Federal Trade Commission allegations that they charged excessive fees and made false promises to clients suffering crushing student loan debts.

The settlement resolves FTC litigation against five defendants: Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi. The agency's complaint against the Arete Financial Group and several related companies.

Though the company is based out of Santa Ana, no further information about the defendants' ages was available.

In the complaint filed in 2019 in Los Angeles federal court, the FTC alleged that Arete and the other defendants pretended to be affiliated with the U.S. Department of Education and deceptively promised loan forgiveness, consolidation, and repayment programs to reduce or eliminate monthly payments and principal balances.

Litigation continues against other defendants in the case, Jay Singh and the two corporate defendants he controls, as well as against seven defaulted corporate defendants, the FTC said.

The order bans the settling defendants from providing student loan debt relief services, prohibits them from violating the Telemarketing Sales Rule, and includes a monetary judgment of $43.3 million, which is partially suspended due to an inability to pay.

The defendants will be required to surrender at least $835,000 and additional assets, which will be used for consumer redress.

According to the FTC, the order also requires the defendants' full cooperation in the ongoing case and any related investigation.