North Bay CEO Faces Prison Time In Student Loan Repayment Scam

SONOMA COUNTY, CA — The CEO of three North Bay companies faces up to 40 years in prison after pleading guilty Friday to wire fraud and money laundering charges in connection with a multi-million-dollar scheme to deceive people into enrolling in his companies' student loan repayment services programs, the U.S. Attorney's Office said.

Brandon Frere, 42, CEO of Ameritech Financial, pleaded guilty in U.S. District Court in San Francisco to one count of wire fraud and one count of money laundering, and admitted as part of his plea that losses caused by his scheme were between $25 million and $70 million from January 2014 through November 2018.

During that period, prosecutors say, Frere owned and operated three companies — American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC) and Ameritech Financial — all based in Rohnert Park.

According to Frere's plea agreement, he used those companies to market student loan document preparation services for borrowers who wished to apply for programs through the U.S. Department of Education. Frere targeted potential customers who were seeking federal loan forgiveness, loan consolidation and reduced-payment programs.

Frere's companies sold consumers "document preparation" services, as well as purportedly optional membership in a "financial education benefits program.”

Frere admitted he instructed his employees to follow misleading sales scripts and to employ deceptive sales tactics so that people would enroll for services without fully understanding what they were paying for.

According to Assistant U.S. Attorney Scott Joiner, who is prosecuting the case:

"In sum, Frere instructed his employees:

"(1) to make false statements concerning the companies’ ability to deliver fixed payments for the life of student loans and loan forgiveness under alternative repayment plans;

"(2) to engage in enrollment practices that improperly inflated a consumers’ family size to reduce their prospective payments under federal alternative repayment plans (and therefore make it appear to the consumer that their monthly payments would be lower than what they would have been if the family size were not inflated); and

"(3) to hide the monthly fees that consumers would pay for a purportedly optional financial education benefits program while leading victims to believe that the benefits program was already included in the document preparation service. Frere admitted for the purposes of sentencing that the amount of losses attributable to his scheme was no less than $25,000,000 and up to $65,000,000."

Frere also admitted that in 2015, to conceal the proceeds of his wire fraud scheme, he began transferring large sums of cash he received through the scheme to overseas bank accounts, Joiner said.

In August 2017, after Frere became involved in litigation with the Federal Trade Commission and became concerned the FTC or the court might be able to seize the proceeds of his fraud, he again transferred money to off-shore accounts, Joiner said.

In February 2018, the FTC filed a federal civil complaint against Frere and his companies.

Then, following an investigation by federal prosecutors, the FTC, FBI, IRS and the U.S. Department of Education Office of Inspector General, Frere was arrested Dec. 5, 2018, at SFO as he attempted to board a flight to Cancun, Mexico.

Frere is now free on bond pending sentencing which is set for March 27.

Prosecutors say Frere faces up to 20 years in prison for each of the two counts. He may also have to pay up to $750,000 in fines.

Bay City News Service contributed to this report.