Consumer Information

November 15, 2024

The parties have not reached a settlement.  Proceedings in the case continue.

On October 25, 2024, the intervening law firms (“Law Firms”) gave notice to the Court that they intended to withdraw from their representation of clients and requested confirmation that doing so would not violate the Court’s Preliminary Injunction.  On November 13, 2024, the Court entered a stipulated Order which (1) confirmed the withdrawals would not violate the Preliminary Injunction, (2) made clear the Court made no finding or ruling about the Law Firms’ withdrawal from representation, and (3) stated the Law Firms “shall not represent to anyone that the Order constitutes a finding by this Court regarding the application of any rules of professional responsibility for attorneys or acts by said firms or attorneys.”  A copy of the November 13 Order is available in the Documents section of this webpage.

The Receiver has no control or authority over the Law Firms and, therefore, cannot advise you as to the timing or process by which they will accomplish their withdrawal.

According to the draft letter submitted to the Court by the Law Firms, there should be a telephone number established by the Law Firms to answer your questions about the withdrawal.  Please contact that number if you have questions.  StratFS staff will not be able to answer your questions about the withdrawal and how it may impact you.  Only the Law Firms can address those questions.

August 28, 2024 Update

The case currently remains pending against all Defendants.  To date, the Plaintiffs (who include the CFPB and numerous States’ Attorneys General) have filed two amended complaints.  (On March 27, 2024, the Plaintiffs filed their First Amended Complaint, and on May 26, 2024, Plaintiffs filed their Second Amended Complaint).  Presently, there are more than 40 Defendants (both corporate entities and individual Defendants) and six Relief Defendants.  Additionally, numerous parties have intervened.

Since the Receiver’s last update, the case continues to be actively litigated, with dozens of legal filings made by the parties in the case.  There have also been numerous hearings, and the Court has held several settlement conferences.  To date, no settlement has been reached and the Court has scheduled one more settlement conference on September 20, 2024.  The Court has indicated that if the parties are unable to settle the case by or at this next conference, then the Court will set dates in the case for discovery to begin and the case will proceed.

May 7, 2024 Update for Consumers – Supplemental Notice to Consumers

Today, a Supplemental Notice to Consumers was sent out via email to consumers enrolled in the debt settlement program administered by Strategic Financial Solutions working with a number of law firms.  A copy of the Notice can be found in the Documents section of this webpage.  We recommend that you read the notice as it discusses consumers’ rights.

May 6, 2024 – Receiver’s Emergency Motion for an Order to Show Case Why Intervenor Law Firms Should Not be Held in Civil Contempt

After discovering that, in direct violation of the Court’s instructions, and without notifying the Court or the Receiver, the intervenor law firms (“Law Firms”) have continued to send out emails and make telephone calls to consumers, the Receiver alerted the Court and filed an emergency motion for an Order to Show Cause re Contempt as the Law Firms.  The Court has now set a briefing and hearing date (May 23, 2024).  A copy of the Motion for an Order to Show Cause can be found in the Documents section of this webpage.

April 15, 2024

On April 15, 2024, the Receiver filed a report with the Court regarding further consumer protection and requested instruction from the Court for the next steps to be taken.  A copy of the Receiver’s Request for Instruction is available in the Documents section of this webpage.  The Court has set a hearing on this matter for April 22.

April 10, 2024 Update

As a supplement to previous notice and receiver website updates, we are providing this update concerning Strategic Financial Solutions and related parties (“Strategic”) which were placed under the control of a receiver in a lawsuit filed by the Consumer Financial Protection Bureau and seven state Attorney Generals’ offices.  They allege that Strategic and law firms which work with Strategic (including the one representing you) are taking illegal advances fees for their debt relief services.  Recently, the Court preliminarily found that Strategic and the law firms were taking unlawful advance fees from clients and issued a Preliminary Injunction prohibiting them from doing so.  Some important information about the lawsuit and your rights follows:

1)  Lawsuit Filed:  On January 10, 2024, the Consumer Financial Protection Bureau, and the States of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina, and Wisconsin (“Plaintiffs”) filed a lawsuit against Strategic Financial Solutions and affiliated companies (“Strategic”) and related individuals (the “Defendants”) alleging they operated a debt-relief operation that collects unlawful advance fees.  (A copy of the Complaint with a complete list of Defendants can be found in the Documents section of this webpage.)  The Defendants vigorously contest the lawsuit.

2)  Temporary Restraining Order Entered:  On January 11, 2024, the Court entered a Temporary Restraining Order (“TRO”), prohibiting the taking of advance fees, freezing Strategic’s assets and appointing what is known as a “receiver” to take temporary control over Strategic.  (A copy of the TRO can be found in the Documents section of this webpage.)

3)  Intervenor Law Firms:   A number of the debt relief law firms (“Law Firms”), including yours, who were not named in the Complaint, but which work closely with Defendants, filed a motion to participate in and defend against the lawsuit.  The Court allowed the Law Firms to do so.  The Law Firms are as follows: Anchor Law Firm, PLLC; Bedrock Legal Group; Boulder Legal Group; Bradon Ellis Law Firm LLC; Canyon Legal Group, LLC; Chinn Legal Group, LLC; Clear Creek Legal, LLC; Credit Advocates Law Firm, LLC; Great Lakes Law Firm; Greenstone Legal Group; Gustafson Consumer Law Group, LLC; Hailstone Legal Group; Hallock & Associates LLC; Hallock and Associates; Harbor Legal Group; Heartland Legal Group; Leigh Legal Group, PLLC; Level One Law; Meadowbrook Legal Group; Michel Law, LLC; Monarch Legal Group; Moore Legal Group, LLC; Newport Legal Group, LLC; Northstar Legal Group; Option 1 Legal; Pioneer Law Firm P.C.; Rockwell Legal Group; Royal Legal Group; Slate Legal Group; Spring Legal Group; Stonepoint Legal Group; The Law Firm of Derek Williams, LLC; The Law Office of Melissa Michel LLC; Whitestone Legal Group; and Wyolaw, LLC.

4)  Preliminary Injunction Entered:  After a two-day evidentiary hearing and consideration of briefs filed by the parties and the Law Firms, on March 4, 2024, the Court entered a Preliminary Injunction (“PI”) against the Defendants and preliminarily determined that Defendants and the Law Firms have taken unlawful advance fees from consumers in violation of the Telemarketing Sales Rule (“TSR”).  The Court also confirmed the appointment of the Receiver.  (A copy of the PI and Decision and Order can be found in the Documents section of this webpage.)  The Defendants and the Law Firms have appealed the PI ruling.

5)  No Further Advance Fees:  The PI prohibits Strategic and the Law Firms from taking any further advance fees from you during the pendency of the lawsuit.  No advance fees have been taken from your funds deposited in accounts at Global and Reliant Asset Management (“RAM”) since January 12, 2024.  The client funds in the Global and RAM accounts belong to you, and you may withdraw or direct them as you see fit.

6)  Settlement Payments Can Continue:  If you are presently making payments to a creditor(s) pursuant to a debt settlement, the Receiver has confirmed with Global and RAM that previously scheduled payments to creditors will continue to be made and that deposits to fund settlements with creditors can still be made.  In other words, if you have an active settlement, it may still be funded by money currently on deposit in your dedicated account, and if you need to deposit additional money into that account to fund scheduled settlement payments, then you are able to do so.

7)  No Further Settlements:  Your debts that were not settled prior to issuance of the TRO have not been, and will not be, negotiated or settled by Defendants while the PI remains in place unless the Court instructs otherwise.

8)  Receiver Will Seek Instruction from the Court:  The Receiver will be filing a Report and a Request for Immediate Instructions with the Court.  In that Report/Request, the Receiver will be seeking guidance from the Court on next steps.  Once the Court has issued an Order with those instructions, the Receiver will provide immediate notice to you.

9)  Customer Service:  Customer service operators are answering phones and responding to emails, but wait times will be lengthy due to the volume of calls and emails.  Unfortunately, the customer service representatives will not be able to give you any guidance on the lawsuit or the path forward beyond what is described above.  If you must contact customer service, email is the best way to do so.

We understand that you may have many questions and will provide another update as soon as we have further guidance from the Court.

January 2024 – CFPB Complaint, Temporary Restraining Order, and Appointment of Temporary Receiver

On January 10, 2024, the Consumer Financial Protection Bureau, and the States of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina, and Wisconsin (“Plaintiffs”) filed a lawsuit against the following parties:

Defendants:
BCF Capital, LLC
Bedrock Client Services, LLC
Boulder Client Services, LLC
Canyon Client Services, LLC
Carolina Client Services, LLC
CS 1 PAAS Services, LLC f/k/a Anchor Client Services, LLC
CS 2 PAAS Services, LLC f/k/a Monarch Client Services, LLC
CS 3 PAAS Services, LLC f/k/a Summit Client Services, LLC
Great Lakes Client Services, LLC
Guidestone Client Services, LLC
Harbor Client Services, LLC
Heartland Client Services, LLC
Newport Client Services, LLC
Northstar Client Services, LLC
Option 1 Client Services, LLC
Pioneer Client Servicing, LLC
Rockwell Client Services, LLC
Royal Client Services, LLC
Stonepoint Client Services, LLC
Strategic Client Support, LLC (f/k/a Pioneer Client Services, LLC)
Strategic Consulting, LLC
Strategic CS, LLC
Strategic Family, Inc.
Strategic FS Buffalo, LLC
Strategic NYC, LLC
StratFS, LLC (f/k/a Strategic Financial Solutions, LLC)
T Fin, LLC
Versara Lending, LLC
Whitestone Client Services, LLC
Jason Blust
Ryan Sasson

Relief Defendants:
Albert Ian Behar
Daniel Blumkin
Jaclyn Blust
Blaise Investments, LLC
Duke Enterprises, LLC
Lit Def Strategies, LLC
Relialit, LLC
Twist Financial, LLC
The Blust Family Irrevocable Trust through Donald J. Holmgren, Trustee

A copy of the Complaint can be found in the Documents section of this webpage.

Temporary Restraining Order and Receiver Appointed

On January 11, 2024, the U.S. District Court for the Western District of New York issued a Temporary Restraining Order (“TRO”) freezing Strategic’s assets and appointing what is known as a “receiver” to take temporary control over Strategic.

A copy of the TRO can be found in the Documents section of this webpage.

Law Firms Intervene

On January 16, 2024, a number of law firms that work closely with the Defendants filed a request to participate in and defend the case, which was approved.  The Law Firms are as follows:

Anchor Law Firm, PLLC, Law Offices of Amber Florio, PLLC (d/b/a Bedrock Legal Group), Boulder Legal Group, LLC, Brandon Ellis Law Firm LLC, Clear Creek Legal, LLC, Credit Advocates Law Firm, JMS Industries, LLC (d/b/a Canyon Legal Group), Great Lakes Law Firm, LLC, Leigh Legal Group, PLLC (d/b/a Greenstone Legal Group), The Brian A. Moore Law Firm LLC (d/b/a Guidestone Law Group), Hailstone Legal Group, LLC, Hallock & Associates LLC, Harbor Legal Group, LLC, Henry Legal Group, LLP (d/b/a Heartland Legal Group), The Law Firm of Derek Williams, LLC (d/b/a Infinite Law Group), Michel Law, LLC (d/b/a Level One Law Group) Moore Legal Group, LLC (d/b/a Meadowbrook Legal Group), Burnette Legal Group, LLC (d/b/a Monarch Legal Group), Greene Legal Group, LLC (d/b/a Newport Legal Group), Northstar Legal Group, LLC, Gardner Legal, LLC (d/b/a Option 1 Legal), Gustafson Consumer Law Group, LLC, Pioneer Law Firm, P.C., Hodyno & Associates, PLLC (d/b/a Rockwell Legal Group), Royal Legal Group, LLC, Chinn Legal Group, LLC (d/b/a Slate Legal Group), The Law Office of Melissa Michel LLC (d/b/a Spring Legal), Donald Norris & Associates, PLLC (d/b/a Stonepoint Legal Group), The Sands Law Group, LLP (d/b/a Whitestone Legal Group), and WyoLaw, LLC.

A copy of the Motion to Intervene can be found in the Documents section of this webpage.

Limited Operations Resumed at Strategic; Expect Long Wait Times

On January 22, 2024, the Receiver resumed limited operations at Strategic for purposes of addressing urgent customer service issues.  If you have an urgent question about your debt relief service or your law firm you can reach out to Strategic, but you should be aware that call wait times and email response times will be significantly longer than usual due to limited staff.

This will impact, and may have already impacted, the services provided to you and your ability to communicate with the customer support.

Clients Continue to Have Control Over Their Dedicated Account

In the meantime, all law firm clients continue to have full control over their client accounts, also called dedicated accounts, which are maintained by the merchant services companies Reliant (RAM) and Global.  The money in your account belongs to you.  The funds can be withdrawn if you choose.  Importantly, the Receiver has confirmed with Reliant (RAM)  and Global that previously scheduled payments to creditors will continue to be made and that deposits to fund settlements with creditors can still be made.  In other words, if you have an active settlement it may still be funded by money currently on deposit in your dedicated account, and if you need to deposit money into that account to fund your scheduled settlement payments, you are still able to do so.

Legal Administration Fee and Service Costs Will Not Be Taken

While the motion filed by the Plaintiff regulatory agencies is pending before the Court, the “Legal Administration Fee” and “Service Costs” will not be deducted from client accounts.  Whether these fees will be taken out in the future depends on the rulings issued by the Court, but for the time being, they will not be withdrawn.

Drafts from Client Accounts Can Continue

Scheduled drafts of funds from customers’ personal bank accounts to their client accounts at Reliant (RAM) or Global are also continuing.  This is important to ensure that client accounts have the funds necessary to make scheduled payments to creditors.  If you need to cancel a scheduled draft of funds from your bank account to your client account, you should contact your law firm telephone number or Reliant (RAM) or Global to request to skip a draft.  Reliant (RAM) can be reached at customersupport@ramservicing.com or (877) 859-1450, and Global can be reached customersupport@ghllc.com or (800) 398-7191.

Versara Lending

Some law firm clients received loans from Versara Lending to pay off creditor settlements.  Payments made to Global to pay the loans can and should continue.

February 1-2, 2024 – Evidentiary Hearing held.  The Court has heard testimony from witnesses for both sides.

February 6, 2024 – Atlas Debt Relief and Timberline Financial

The debt relief services offered by Atlas Debt Relief and Timberline Financial have been resumed.  Payments to the dedicated accounts at Reliant (RAM) and Global may continue.  The funds in these accounts remain the consumers.

February 7, 2024 – Arguments heard.  The Court heard arguments from both sides.  We expect the Court will issue a decision and determine whether Strategic and the Law Firms have taken unlawful advance fees or whether they fall within an exemption which allows them to do so.

February 16, 2024 – Preliminary Injunction Motion Remains Pending.  At the parties’ request, the Court has extended the TRO while the parties discuss settlement.

March 4, 2024 – Preliminary Injunction Entered

The Court has preliminarily found that the Defendants and Law Firms are taking unlawful advance fees for debt relief services in violation of the Telemarketing Sales Rule.  The Court has entered a Preliminary Injunction Order against the Defendants which prohibits them and the Law Firms from taking advanced fees.

In its Decision and Order issued in connection with the Preliminary Injunction, the Court made a number of preliminary factual findings and legal rulings after conducting a two-day evidentiary hearing  and reviewing the parties’ associated briefing.

Copies of the Preliminary Injunction and the Decision and Order can be found in the Documents section of this webpage.

The Preliminary Injunction maintains an asset freeze and the continuation of a receiver over the StratFS-related businesses.

Employee Information

May 16, 2024 – Employee Update – Flexible Spending Account

The Flexible Spending Account (FSA) plans have not been renewed for 2024. All outstanding FSA claims must be submitted as soon as possible. The deadline for filing a claim may be as early as May 31, 2024, depending on your coverage end date. This deadline applies to your health care spending account, dependent care spending account, and your commuter spending account. We do not have the ability to extend the deadline. Any unused funds in your account may be forfeited if your claims are not timely filed.

Please review your online account at https://participant.wageworks.com/home.aspx, or alternatively at www.healthequity.com, select LOGIN, select WAGEWORKS, then select EMPLOYEE LOGIN. You can contact HealthEquity/WageWorks member services at 877-924-3967 anytime, they are available 24/7/365.

April 1, 2024 – Employee Update – Personal Items in NYC and Buffalo Offices

On Wednesday, April 10, 2024, the Buffalo and New York City sites will be open from 12:00 p.m. to 4:00 p.m. (ET) to allow those with personal belongings at the sites to retrieve their items and return company equipment.  This will be the final opportunity to collect personal belongings.

March 8, 2024 – Employee Information – Notice of Employment Termination for Employees Not Asked to Return to Work

A notice of employment termination was placed in the mail today to each employee who has not been called back to work.  As you are aware, on January 11, 2024, the United States District Court for the Western District of New York (“Court”) entered an Ex Parte Temporary Restraining Order with an Asset Freeze, Appointment of a Receiver, and Other Equitable Relief and an Order to Show Cause Why a Preliminary Injunction Should Not Issue (“TRO”) against StratFS, LLC (f/k/a Strategic Financial Solutions, LLC), Strategic Client Support, LLC (f/k/a Pioneer Client Services, LLC), Strategic Consulting, LLC, Strategic CS, LLC, and Strategic LD, LLC (collectively, the “Company”), as well as related companies and individuals.  The TRO was sought by the United States Consumer Financial Protection Bureau (“CFPB”) and seven state attorneys general (Colorado, Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin) (collectively, “Plaintiffs”).  Plaintiffs allege the Company and other defendants violated federal and state law and collected hundreds of millions of dollars in illegal fees from consumers.

As the Company informed you in its prior notices, if the Court granted the request for Preliminary Injunction sought by Plaintiffs, the Company expected it would need to undertake a reduction in force that would result in the separation of your employment.

On March 4, 2024, the Court granted the governments’ request for a Preliminary Injunction and enjoined the Company from engaging in significant aspects of its pre-lawsuit business.  As a result, and consistent with our prior notice, this letter confirms that your employment with the Company has terminated, effective March 8, 2024 (the “Termination Date”).

Any group health, dental, and vision insurance coverage you had through the Company previously ceased on February 29, 2024.  At your election, you may continue your group health coverage, subject to and in accordance with the terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and/or any similar state law (“COBRA”), to the extent COBRA is and remains available.  If you elect and are eligible for COBRA, you will be solely responsible for any applicable premiums, subject to and in accordance with COBRA.

Any life insurance coverage you had through the Company previously ceased on February 29, 2024.  For information regarding any right you may have to convert this benefit to an individual policy, contact ADVANCED CORPORATE SOLUTIONS at (202) 421-8873.

Any short-term  disability  insurance coverage you had through the Company previously ceased on February 29, 2024.

Any participation in the Company’s 401(k) plan and ESOP ended as of the Termination Date.

If you have any questions, please contact hr@stratfs.com or info@regulatoryresolutions.com.  We appreciate this has been a stressful and difficult time and thank you for your service.  We wish you well in your future endeavors.

February 26, 2024 – Employee Information – Updated Notice of Conditional of Reduction in Force

As we previously posted, the initial Notice of Conditional Reduction in Force expired on Sunday, February 25.  Because the parties have asked for the TRO to be extended a number of times to discuss a potential settlement, there has been no decision on the Motion for Preliminary Injunction.  At present, the TRO expires tomorrow, but the parties could extend that date in order to continue settlement discussions.  As a result, we were required to send out a Postponed Notice of Conditional Reduction of Force which was placed in the mail on Saturday, February 24 to each employee who has not been called back to work.  If the Court grants the governments’ request for a Preliminary Injunction, the Company expects that the separations of all employees who have not been called back to work will occur during the 14-day period starting on Monday, February 26, 2024 and ending on Sunday, March 10, 2024.  Please see the updated conditional notice for additional information.

Affected employees may be eligible to receive job retraining, re-employment services, or other assistance with obtaining new employment from the New York State Department of Labor or its workforce partners.  They may also be eligible for unemployment insurance benefits.

February 22, 2024 – Employee Update – Insurance

At present, the receiver does not anticipate making further premium payments for employees who have not been asked to return to work.  We will notify Highmark (health), Ameritas (dental/vision), and Mutual of Omaha (life/disability) regarding those affected employees.  Coverage will be terminated effective 3/1/2024 12:00 a.m., and employees will have the opportunity to elect COBRA for temporary continuation of group health, dental, and/or vision insurance.  We understand that COBRA is not an option for life/disability.

Once Highmark is notified that an employee is no longer covered under the plan, Highmark will send a letter to the employee regarding COBRA.  We are requesting a sample letter that we hope to post on the website.  The employee has 60 days from the date notified to elect COBRA, and the employer has another 60 days to process the paperwork.  The employee pays the insurance premium in full to employer, and employer then pays the premium to Highmark.

For those who have returned to work, the insurance status will remain the same.

Answers to the most common questions are set out below.

1.  What is COBRA continuation health coverage?
Answer:  The Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions amend the Employee Retirement Income Security Act, the Internal Revenue Code, and the Public Health Service Act to require group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated.

2.  What does COBRA do?
Answer:  COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events.  COBRA continuation coverage is often more expensive than the amount that active employees are required to pay for group health coverage, since the employer usually pays part of the cost of employees’ coverage and all of that cost can be charged to individuals receiving continuation coverage.

3.  Are there alternatives for health coverage other than COBRA?
Answer:  If you become entitled to elect COBRA continuation coverage when you otherwise would lose group health coverage under a group health plan, you should consider all options you may have to get other health coverage before you make your decision.  There may be more affordable or more generous coverage options for you and your family through other group health plan coverage (such as a spouse’s plan), the Health Insurance Marketplace, or Medicaid.

Eligibility for COBRA continuation coverage won’t limit your eligibility for Marketplace coverage or for a tax credit.  You can apply for Marketplace coverage at HealthCare.gov or by calling 1-800-318-2596 (TTY 1-855-889-4325).  To qualify for special enrollment in a Marketplace plan, you must select a plan within 60 days before or 60 days after losing your job-based coverage.

4.  How do I elect COBRA coverage?
Answer:  Please email hr@stratfs.com as soon as possible, but no later than 60 days after being notified.  An application must be completed and received within 60 days of being notified in order to be eligible to elect COBRA coverage.

February 16, 2024 – Strategic Financial Solutions Consumer Update – Preliminary Injunction Motion Remains Pending

As reported below, Strategic Financial Solutions and affiliated companies (“Strategic”) were sued on January 10, 2024, by the U.S. Consumer Financial Protection Bureau and the attorneys general of seven states alleging that Strategic was unlawfully taking advanced fees in connection with the debt relief services offered through the law firms.  If you wish, you can review a copy of the Plaintiffs’ Complaint in the Documents section of this webpage.  Strategic provided marketing, client, and administrative services to a number of debt relief law firms, including:

  • Anchor Law Firm, PLLC;
  • Ascend Legal Group;
  • Boulder Legal Group, LLC;
  • Brandon Ellis Law Firm LLC;
  • Burnette Legal Group, LLC d/b/a Monarch Legal Group;
  • Carolina Legal Services;
  • Charter Legal;
  • Chinn Legal Group, LLC;
  • Clear Creek Legal, LLC;
  • Colonial Law Group;
  • Credit Advocates Law Firm;
  • Donald Norris & Associates, PLLC d/b/a Stonepoint Legal Group;
  • Fontana Law Group, LLC;
  • Frontier Consumer Law Group a/k/a Leigh and Laruwe Law Firm;
  • Gardner Legal, LLC d/b/a Option 1 Legal;
  • Great Lakes Law Firm, LLC;
  • Greene Legal Group, LLC d/b/a Newport Legal Group;
  • Gustafson Consumer Law Group, LLC;
  • Hailstone Legal Group, LLC;
  • Hallock & Associates;
  • Harbor Legal Group, LLC;
  • Henry Legal Group, PLLC d/b/a Heartland Legal Group;
  • Hodyno & Associates, PLLC d/b/a Rockwell Legal Group;
  • JMS Industries, LLC d/b/a Canyon Legal Group;
  • Law Office of Melissa Michel LLC d/b/a Spring Legal;
  • Law Offices of Amber Florio, PLLC d/b/a Bedrock Legal Group;
  • Law Offices of Arne Skatrud & Associates d/b/a Cornerstone Legal Group LLC;
  • Law Offices of Brandon S Chabner d/b/a Golden Law LLP;
  • Leigh Legal Group, PLLC d/b/a Greenstone Legal Group;
  • Lori Leigh & Associates d/b/a Phoenix Legal;
  • Michel Law, LLC d/b/a Level One Law Group;
  • Moore Legal Group, LLC d/b/a Meadowbrook Legal Group;
  • Northstar Legal Group, LLC;
  • Pioneer Law Firm, P.C.;
  • Royal Legal Group, LLC;
  • Sandstone Law Firm;
  • Slate Legal Group;
  • Strong Law Group PLLC;
  • Summit Law Firm;
  • The Brian A. Moore Law Firm LLC d/b/a Guidestone Law Group;
  • The Law Firm of Derek Williams, LLC d/b/a Infinite Law Group;
  • The Law Office 554;
  • The Sands Law Group, LLP d/b/a Whitestone Legal Group;
  • White Oak Law Group; and
  • Wyolaw, LLC.

Temporary Restraining Order and Receiver Appointed

On January 11, 2024, the U.S. District Court for the Western District of New York issued a temporary restraining order freezing Strategics’ assets and appointed what is known as a “receiver” to take temporary control over Strategic.  This month, the U.S. District Court is expected to make a decision regarding the business operations of Strategic going forward.  Until then, the temporary restraining order will likely remain in effect.  For updates regarding the case, you can visit this page.

Importantly, the debt relief law firms have not been sued and are not subject to the temporary restraining order.  While the firms’ ability to provide services has been impacted by the action against Strategic (since Strategic provides the client services for the law firm), your law firm may still be able to assist you with urgent legal matters.

Limited Operations Resumed at Strategic; Expect Long Wait Times

On January 22, 2024, the Receiver resumed limited operations at Strategic for purposes of addressing urgent customer service issues.  If you have an urgent question about your debt relief service or your law firm you can reach out to Strategic, but you should be aware that call wait times and email response times will be significantly longer than usual due to limited staff.

This will impact, and may have already impacted, the services provided to you and your ability to communicate with the customer support.

Clients Continue to Have Control Over Their Dedicated Account

In the meantime, all law firm clients continue to have full control over their client accounts, also called dedicated accounts, which are maintained by the merchant services companies Reliant (RAM) and Global.  The money in your account belongs to you.  The funds can be withdrawn if you choose.  Importantly, the receiver has confirmed with Reliant (RAM)  and Global that previously scheduled payments to creditors will continue to be made and that deposits to fund settlements with creditors can still be made.  In other words, if you have an active settlement it may still be funded by money currently on deposit in your dedicated account, and if you need to deposit money into that account to fund your scheduled settlement payments, you are still able to do so.

Legal Administration Fee and Service Costs Will Not Be Taken

While the motion filed by the plaintiff regulatory agencies is pending before the Court, the “Legal Administration Fee” and “Service Costs” will not be deducted from client accounts.  Whether these fees will be taken out in the future depends on the rulings issued by the Court, but for the time being, they will not be withdrawn.

Drafts from Client Accounts Can Continue

Scheduled drafts of funds from customers’ personal bank accounts to their client accounts at Reliant (RAM) or Global are also continuing.  This is important to ensure that client accounts have the funds necessary to make scheduled payments to creditors.  If you need to cancel a scheduled draft of funds from your bank account to your client account, you should contact your law firm telephone number or Reliant (RAM) or Global to request to skip a draft.  Reliant (RAM) can be reached at customersupport@ramservicing.com or (877)-859-1450, and Global can be reached customersupport@ghllc.com or (800) 398-7191.

Versara Lending

Some law firm clients received loans from Versara Lending to pay off creditor settlements.  Payments made to Global to pay the loans can and should continue.

Atlas Debt Relief and Timberline Financial

The debt relief services offered by Atlas Debt Relief and Timberline Financial have been resumed.  Payments to the dedicated accounts at Reliant (RAM) and Global may continue.  The funds in these accounts remain the consumers.

February 16, 2024 – Employee Paid Time Off (PTO)

We have heard from a number of employees inquiring about accrued PTO.  As we reported earlier, the Receiver does NOT have authority to pay pre-receivership obligations absent a further order from the Court.  TRO IX(J), “The Receiver shall apply to the Court for prior approval of any payment of any Debt or obligation incurred by the Receivership Defendants prior to the date of the entry of this Order, except payments that the Receiver deems necessary or advisable to secure the Assets for the Receivership Defendants, such as rental payments.”  The Receiver previously sought approval from the Court to pay the January 9-12 payroll.  This approval did not include the payment of accrued PTO.

As reported earlier, we understand the parties are in discussions which could potentially mitigate the impact on the Company’s business operations.  If business operations continue as a result of settlement discussions, StratFS may be in a position to pay for accrued time off.

February 15, 2024 – Employee Update – Health Insurance

We have received several inquiries this morning regarding insurance declines.  Premiums for health, dental, vision, life and short-term disability insurance policies were paid for all employees that were active prior to the TRO.  We confirmed this morning that the policies remain active.

If you have a problem or need to verify benefits, please call the insurance carrier directly:

  • Highmark (health) – 800-544-2583
  • Ameritas (dental and vision) – 800-487-5553
  • Mutual of Omaha (life and short-term disability) – 800-769-7159

February 14, 2024 – Employee Update – Personal Items in NYC and Buffalo Offices

We have heard from employees asking to retrieve personal items from the offices.

The NYC office will be open for employees to pick up personal items on Saturday, February 17 from 9:00 a.m. – 1:00 p.m. and again on Monday, February 19 from 9:00 a.m. – 1:00 p.m.

To streamline things, we have set up a scheduling website for NYC employees to use.  Please use this tool to schedule your time – https://signup.com/go/tZmMMwT

The Buffalo office will be open again on Wednesday, February 21 from 2:00 p.m. – 5:00 p.m. to allow those employees to do so as well.

February 8, 2024 – Employee Update – Conditional Notice of Reduction in Force Mailed

A conditional notice of reduction in force was placed in the mail today to each employee who has not been called back to work. As you are aware, on January 11, 2024, the United States District Court for the Western District of New York (“Court”) entered an Ex Parte Temporary Restraining Order with an Asset Freeze, Appointment of a Receiver, and Other Equitable Relief and an Order to Show Cause Why a Preliminary Injunction Should Not Issue (“TRO”) against Strategic Client Support, LLC (f/k/a Pioneer Client Services, LLC), Strategic Consulting, LLC, Strategic CS, LLC, and Strategic LD, LLC (collectively, the “Company”) as well as related companies and individuals. The TRO was sought by the United States Consumer Financial Protection Bureau (“CFPB”) and seven state attorneys general (Colorado, Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin). The CFPB and attorneys general allege the Company and other defendants violated federal and state law and collected hundreds of millions of dollars in illegal fees from consumers.

The Court is currently considering the CFPB’s and the attorneys generals’ request that it issue a Preliminary Injunction that would effectively prohibit the Company from engaging in significant aspects of its pre-TRO business. The hearing on this request has been held and we expect a decision shortly. We understand that the parties are in discussions which could potentially mitigate the impact on the Company’s business operations. If a settlement is not reached and the Court grants the governments’ request for a Preliminary Injunction, the Company anticipates it will need to undertake a reduction in force that will impact employees who work at its Buffalo office, its Manhattan office, and remotely across the United States. If the Court grants the governments’ request for a Preliminary Injunction, the Company expects that the separations of all employees who have not been called back to work will occur during the 14-day period starting on Monday, February 12, 2024 and ending on Sunday, February 25, 2024.

Affected employees may be eligible to receive job retraining, re-employment services, or other assistance with obtaining new employment from the New York State Department of Labor or its workforce partners. They may also be eligible for unemployment insurance benefits. Please see the conditional notice for additional information.

February 8, 2024 Update – Personal Items in NYC Office

We anticipate opening the New York City office late next week to allow employees to pick up personal items.  We will post a notice to this webpage when a date and time has been scheduled.

February 5, 2024 – Employee Update – February Health, Vision, Dental, Life and Short Term Disability Insurance Premiums Will be Paid

Today the Receiver filed an Emergency Motion for approval to pay February health, dental, vision, life and short term disability insurance premiums.  The Court has granted the Motion and the fees for February will be paid and coverage will remain active.

Update – Personal Items in Buffalo Office

We have been contacted by several employees about picking up personal items in the Buffalo office.  The office will be open this Wednesday from 9-noon to retrieve personal items.

February 1, 2024, Employee Update

We have heard from a number of employees that their paycheck has not been direct deposited into their bank account yet.  We confirmed with ADP this morning that funds have been transferred to all of the receiving banks.  Contact your bank regarding their processing time to post your payroll deposit.  You can login to the ADP website to view your paystub.

January 31, 2024, Employee Update (3:30 p.m. EST)

Payroll has been submitted to ADP.  We understand that ADP has transferred the direct deposit funds to all the receiving banks.  The timing when you can expect to see the funds in your individual bank account depends on the processing time for your bank.  ADP advised that the funds might be available to you as early as today, but more likely tomorrow, February 1, 2024.  We apologize again for the delay.

January 30, 2024, Employee Update 

Despite our best efforts, we were unable to submit payroll today prior to ADP closing for the day.  We anticipate submitting payroll early tomorrow morning, at which time we will inquire when employees can expect the funds to be directly deposited.  We apologize for the delay and will request that ADP expedite the payroll if possible.  We will provide an update tomorrow late morning.

We understand that health insurance through Blue Cross Blue Shield has been paid for January and therefore coverage will continue through 1/31/2024.  The premium for February has not yet been paid, and while there is a short grace period, we will not know how to proceed until the outcome of the preliminary injunction hearing scheduled, which is set to begin on February 1st.

As noted last week, we have been informed by ADP that W-2s were sent out on January 19.

January 30, 2024, Employee Update (4:00 p.m. EST)

We are working hard to get everything to ADP by a 5:30 p.m. (EST) deadline, so that payroll can be funded tomorrow.

We will update on payroll and health insurance sometime after 5:30 p.m. this afternoon.

January 26, 2024 – Update for Employees: Order Authorizing Receiver to Pay Pre-Receivership Payroll Expenses

On January 25, 2024, the Receiver filed a Motion with the Court for authorization to disburse funds from the Receivership Estate to pay employees of the Receivership Defendants who worked during the period January 9, 2024 through January 12, 2024.  The Court has granted that Motion.  The Receivership Estate will fund base wages or salaries (but not commissions or bonuses) for employees who were not senior executives of the Receivership Defendants.  This does not include paying any wages to employees for the law firms as the law firms are not Receivership Defendants.

A copy of the Receiver’s Motion and Declaration, as well as the Court’s Order are available in the Documents section of this webpage.

We have also confirmed with ADP, the payroll processing company used by Receivership Defendants, that employee W2s were mailed on January 19, 2024.

January 25, 2024 – Update for Employees: Questions Regarding Pay and Employment Status

As you are aware, a lawsuit was filed on January 10, 2024 by the Consumer Financial Protection Bureau and seven state attorneys general against StratFS alleging StratFS is taking advanced fees in violation of the Telemarketing Sales Rule (“TSR”) and other statutory violations.  On January 11, 2024, a federal Court issued a temporary restraining order (“TRO”), froze the related companies’ assets, and appointed what is known as a receiver.  The receiver was directed to take temporary control of the companies until a preliminary injunction hearing takes place on February 1-2, 2024.  After that hearing, the Court will determine what to do with these businesses going forward.

Periodic updates will be posted on this page.

We realize this is a difficult and uncertain time for employees of StratFS.  We have received many emails in the last two days which ask very similar questions about pay and employment.  Answers to the most common questions are set out below.

1.  Will employees be paid for the pay period January 9 through January 12 before the TRO was entered and a receiver came on site?

Answer: The receiver does NOT have authority to pay pre-receivership obligations absent a further order from the Court.  TRO IX(J) “The Receiver shall apply to the Court for prior approval of any payment of any Debt or obligation incurred by the Receivership Defendants prior to the date of the entry of this Order, except payments that the Receiver deems necessary or advisable to secure the Assets for the Receivership Defendants, such as rental payments.”

The receiver intends to seek permission from the Court to make payroll payments to the majority of StratFS employees for the January 9-12 period.  The receiver will not seek permission to pay senior company executives (SVP and up with one exception), and he will only request authority to pay base pay for sales positions.  If the Court grants the receiver permission, we will work towards having the payments made on January 31.

2.  Will employees be paid after January 12?

Answer: At present, the receiver does not anticipate making further payroll payments to employees who have not been asked to return to work.  For those who have returned to work, the pay will resume as of the return date.

3.  How long will my health insurance coverage last?

Answer:  We understand StratFS has paid the health insurance premium for January and therefore coverage will continue through the end of January.  We hope to provide additional health insurance information next week.

4.  What is my employment status?

Answer: If you have not been asked to return to work at this point, it is unlikely that you will be asked to return prior to the preliminary injunction hearing on February 1-2.  This may change depending on our review of the business and the outcome of the preliminary injunction hearing scheduled, which is set to begin on February 1st, and the amount of assets available to the receivership estate.  The Court will set its own timetable for deciding next steps, but it is expected that the Court will act quickly.  We cannot advise whether you qualify for unemployment; you should contact the appropriate state agency to address this question.

5.  I was a law firm employee; how will I be paid?

Answer: The law firms are not Receivership Defendants; the receiver does not have authority to act on behalf of the law firms.  You must reach out to your employers and inquire about payment.

6.  Can I be provided my 2023 W-2 form?

Answer:  ADP should be providing tax forms in the normal course.

Finally, we sincerely appreciate that this a stressful and uncertain time for employees of StratFS.

We will post periodic updates to employees on this page.  Should you need additional guidance, we suggest you review the information published by the New York State Department of Labor: www.dol.ny.gov.

If you have particular questions, please send them to info@reglatoryresolutions.com, and we will do our best to respond.

January 23, 2024 – Notice of CFPB Complaint, Temporary Restraining Order, and Appointment of Temporary Receiver

Employee Notice

If you are an employee of StratFS, LLC, Strategic Consulting, LLC, Strategic Family, Inc., or their various affiliated companies (collectively, the “StratFS”), please take note of the following:

Lawsuit by Federal and State Regulators
On January 10, 2024, the Consumer Financial Protection Bureau and seven state attorneys general filed suit against StratFS alleging StratFS is taking advanced fees in violation of the Telemarketing Sales Rule (“TSR”) and other statutory violations.  On January 11, 2024, a federal Court issued a temporary restraining order (“TRO”), froze the related companies’ assets, and appointed what is known as a receiver.  The receiver was directed to take temporary control of the companies until a preliminary injunction hearing takes place on February 1-2, 2024.  After that hearing, the Court will determine what to do with these businesses going forward.  After the hearing we will provide you with additional information on the status of the business. 

Return of Employees
The TRO provides the receiver may continue to conduct the business of StratFS if it can be operated lawfully and profitably using the assets of the receivership estate.

On Monday, a number of client service employees and supporting functions did return to work in order to service StratFS clients.  We will continue to monitor the situation and may possibly bring in additional customer service employees as necessary.  If you are requested to return to work you will be contacted by StratFS personnel.

Follow Up Information
At present, the receiver does not anticipate making further payroll payments to employees who have not been asked to return.  This may change depending on the outcome of the preliminary injunction hearing scheduled to begin on February 1st and the amount of assets available to the receivership estate.

We realize that this is a difficult and uncertain time and appreciate this news will be a source of concern.  Going forward, we will post periodic updates to employees on this page.  Should you need additional guidance, we suggest you review the information published by the New York State Department of Labor: www.dol.ny.gov.

CFPB Complaint, Temporary Restraining Order, and Appointment of Temporary Receiver

On January 10, 2024, the Consumer Financial Protection Bureau, and the States of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina, and Wisconsin (“Plaintiffs”) filed a lawsuit against the following parties:

Defendants
BCF Capital, LLC
Bedrock Client Services, LLC
Boulder Client Services, LLC
Canyon Client Services, LLC
Carolina Client Services, LLC
CS 1 PAAS Services, LLC f/k/a Anchor Client Services, LLC
CS 2 PAAS Services, LLC f/k/a Monarch Client Services, LLC
CS 3 PAAS Services, LLC f/k/a Summit Client Services, LLC
Great Lakes Client Services, LLC
Guidestone Client Services, LLC
Harbor Client Services, LLC
Heartland Client Services, LLC
Newport Client Services, LLC
Northstar Client Services, LLC
Option 1 Client Services, LLC
Pioneer Client Servicing, LLC
Rockwell Client Services, LLC
Royal Client Services, LLC
Stonepoint Client Services, LLC
Strategic Client Support, LLC (f/k/a Pioneer Client Services, LLC)
Strategic Consulting, LLC
Strategic CS, LLC
Strategic Family, Inc.
Strategic FS Buffalo, LLC
Strategic NYC, LLC
StratFS, LLC (f/k/a Strategic Financial Solutions, LLC)
T Fin, LLC
Versara Lending, LLC
Whitestone Client Services, LLC
Jason Blust
Ryan Sasson

Relief Defendants
Albert Ian Behar
Daniel Blumkin
Jaclyn Blust
Blaise Investments, LLC
Duke Enterprises, LLC
Lit Def Strategies, LLC
Relialit, LLC
Strategic ESOP
Strategic ESOT
Twist Financial, LLC
The Blust Family Irrevocable Trust through Donald J. Holmgren, Trustee

A copy of the Complaint can be found in the Documents section of this webpage.  We should note that Defendants dispute the allegations and there have been no final determinations by the Court.

The Court entered a Temporary Restraining Order (“TRO”) on January 11, 2024, which prohibits certain unlawful conduct and appoints a Temporary Receiver to take possession and control of the businesses.  The Temporary Receiver has paused operations as he conducts a review of the businesses.  A copy of the TRO can be found in the Documents section of this webpage.

On February 1-2, 2024, the Court will hold a hearing to determine whether a Preliminary Injunction should be entered.  A Preliminary Injunction would continue some or all of the restrictions in the TRO and keep the Receiver in place until there is a trial of the case.  At least until the Preliminary Injunction hearing, some or all operations will be on pause.

We will post periodic updates to this website.  If you have additional questions, please send them to info@regulatoryresolutions.com and reference the company involved in the subject line.