May 24, 2022

On March 30, 2022, the Court entered an Amended Stipulated Order for Permanent Injunction and Monetary Judgment as to Defendants Arete Financial Group; Arete Financial Group LLC; CBC Conglomerate LLC; Diamond Choice Inc.; J&L Enterprise LLC; La Casa Bonita Investments, Inc.; and Relief Defendant MJ Wealth Solutions, LLC on March 30, 2022.  (The Order is linked to the right.)  The Receiver’s Final Report and Request for Discharge was filed on April 4, 2022 and is pending before the Court.  (A copy of the Report is linked to the right.)  Upon Court approval of the Receiver’s discharge, the funds that the Receiver has marshalled will be transferred to the Federal Trade Commission.  If the Federal Trade Commission implements a consumer redress program, the information will be available on their website (https://www.ftc.gov/enforcement/cases-proceedings/refunds).

March 14, 2022

On January 26, 2022, the Arete Entity Defendants and the FTC submitted a proposed Stipulated Order for Permanent Injunction and Monetary Judgment as to the remaining Defendants – Arete Financial Group, Arete Financial Group LLC, CBC Conglomerate LLC, Diamond Choice Inc., J&L Enterprise LLC, La Casa Bonita Investments, Inc., and Relief Defendant MJ Wealth Solutions, LLC.  The proposed Order is still pending before the Court.

The Receiver has completed his duties as they pertain to his investigation and is awaiting the outcome of the ruling on the proposed Order before filing his request for discharge with the  Court.

October 29, 2021

Stipulated Orders for Permanent Injunction have been entered against all individual Defendants, as well as Defendants American Financial Support Services Inc. and US Financial Freedom Center, Inc.

On September 16, 2021, Defendants Arete Financial Group d/b/a Arete Financial Freedom and Arete Financial Group LLC (“Arete Entity Defendants”) made their first appearance in the case by filing a motion to set aside the entry of default which was being pursued by the FTC.  The Arete Entity Defendants and the FTC entered into settlement discussions and filed a stipulation with the Court to continue the hearing on the default judgment.  The Court granted their request on September 29, and the hearing was rescheduled to November 12, 2021.

The Receiver is winding up his duties as they pertain to his investigation.  If the FTC prevails in the case, the matter of refunds for customers of Defendants’ student loan debt relief businesses will be an issue for the FTC and the Court to resolve.  As further information becomes available, we will post it on the Receiver’s website.

June 30, 2021

On June 14, 2021, the parties filed with the Court a revised proposed Stipulated Order for Permanent Injunction and Monetary Judgment as to Defendants American Financial Support Services Inc., US Financial Freedom Center, Inc., and Jay Singh.  The status conference on that proposed Order, as well as the FTC’S Motion for Default Judgment against Defendants Arete Financial Group; Arete Financial Group LLC; CBC Conglomerate LLC; Diamond Choice Inc.; J&L Enterprise LLC; La Casa Bonita Investments, Inc.; and Relief Defendant MJ Wealth Solutions, LLC has been continued to July 23, 2021.

May 13, 2021

At the hearing held on May 7, 2021, the Court extended the stay of the case until June 11, 2021, at which time it will hold another status conference to consider the proposed Stipulated Order for Permanent Injunction and Monetary Judgment as to Defendants American Financial Support Services Inc., US Financial Freedom Center, Inc., and Jay Singh.

The hearing on the FTC’S Motion for Default Judgment Against Defendants Arete Financial Group; Arete Financial Group LLC; CBC Conglomerate LLC; Diamond Choice Inc.; J&L Enterprise LLC; La Casa Bonita Investments, Inc.; and Relief Defendant MJ Wealth Solutions, LLC has been continued to May 28, 2021.

February 19, 2021

On February 8, 2021, the Court stayed the case for 90 days to allow the FTC and Defendants American Financial Support Services, Inc., US Financial Freedom Center, Inc., and Jay Singh (“Stipulating Defendants”) to reach a final settlement.  At the end of that time, the FTC and the Stipulating Defendants will file either a proposed Stipulated Order for Permanent Injunction and Monetary Judgment for the Court’s approval, or a joint status report regarding their settlement efforts.

Final Judgment has been entered as to Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi (see Documents section of the Receiver’s website).  The remaining Defendants (Arete Financial Group; Arete Financial Group LLC; CBC Conglomerate LLC; Diamond Choice Inc.; J&L Enterprise LLC; La Casa Bonita Investments, Inc.; and Relief Defendant MJ Wealth Solutions, LLC) have not answered or other appeared in the case and the Clerk of the Court has entered default against them.  The FTC’s motion for default judgment is pending.

October 23, 2020 – Beware of Calls from Telemarketers Offering Refunds

The Receiver’s office received a disturbing report from a consumer who previously used American Financial Support Services (American Financial).  The consumer was contacted yesterday by a telemarketer purportedly offering a refund of money she paid to American Financial.  The telemarketer explained that in order to refund the consumer’s money, the consumer would need to fill out an online form and provide banking information.  The telemarketer had a heavy accent, appeared to be calling from a call center, and had access to the consumer’s personal information which she had provided to American Financial.  The consumer wisely declined the request to fill out the online form.

As reported in the Receiver’s Preliminary Report, Defendant Jay Singh ran “the student loan debt relief business of American Financial and US Financial [Freedom Center] by contracting with offshore Indian call rooms to secure customers for student loan relief.”  Preliminary Report at p. 15.  While we have no reason to suspect Defendant Singh’s involvement, it seems possible that the call room(s) used by Singh/American Financial/US Financial had access to consumers’ personal information and are now using that information to contact consumers.

Please be aware that American Financial/US Financial (or any other Defendant for that matter) are NOT offering refunds.  As explained in the Receiver’s FAQs, “If the FTC prevails in the case, the matter of refunds for customers of Defendants’ student loan debt relief businesses will be an issue for the FTC and the Court to resolve.  This determination is a long way down the road.”  https://regulatoryresolutions.com/wp-content/uploads/2019/11/Arete-FAQs-June-5-2020.pdf

If you are contacted, we strongly advise you NOT to provide any information and to reach out to the Receiver’s office at info@regulatoryresolutions.com (Subject – Arete Financial Receivership.)  If we determine that a substantial number of consumers are being contacted, we may need to bring the issue to the attention of the Court.

July 22, 2020

On March 20, 2020 the Court entered defaults against Corporate Defendants Arete Financial Group, d/b/a Arete Financial Freedom; Arete Financial Group LLC; CBC Conglomerate LLC, d/b/a 1file.org; Diamond Choice Inc., d/b/a Interest Rate Solutions; J&L Enterprise LLC, d/b/a Premier Solutions Servicing; and La Casa Bonita Investments, Inc., f/k/a La Casa Bonita Investments LLC, d/b/a Education Loan Network and Edunet, as well as against Relief Defendant MJ Wealth Solutions, LLC.  Although these parties were served with the Complaint, they failed to file a response to the Complaint, and have not otherwise appeared or defended themselves in this action.

The case has been assigned to the Alternative Dispute Resolution and the parties must mediate no later than November 30, 2020.  Depending on the outcome of the mediation, the parties could either reach a settlement or proceed to trial.

In December 2019, the Receiver permanently closed and vacated the offices of the Receivership Entities and has transferred all funds from the frozen accounts of the Receivership Entities to the receivership.  If the FTC prevails in the case, the matter of refunds for customers of Defendants’ student loan debt relief businesses will be an issue for the FTC and the Court to resolve.

For those consumers who worked with Defendants for student loan debt relief, we recommend that you contact your student loan servicer regarding the status of your loan.  A list of approved student loan servicers can be found on the U.S. Department of Education website at: https://studentaid.gov/manage-loans/repayment/servicers.

If you don’t have the contact information for your loan servicer, you can find it at studentloans.gov.  If your loan payments were not made or your loan is in default, ask your loan servicer what repayment options are available for your loan.  The Federal Student Aid guide (https://studentaid.ed.gov/sa/repay-loans#guide) has information that may help you choose a repayment plan and learn about other options.

February 24, 2020
Arete Defendants Allowed to Resume Debt Settlement Operations

On January 27, 2020, the Court issued an Order allowing the Arete Financial Group to resume debt settlement operations.  See the Documents section of this webpage for a copy of the Order.  The Preliminary Injunction remains in force in all other respects, including the prohibitions associated with defendants’ student loan debt relief operation.

Preliminary Injunction Entered Against All Defendants

On December 17, 2019, the Court issued a Preliminary Injunction as to all defendants.  This Order continued the asset freeze and the appointment of a receiver.  See the Documents section of this webpage for a copy of the Preliminary Injunction.

Notice to Employees – January 29, 2020 – Payroll and W-2s

As you may know, the Court issued a Temporary Restraining Order and Preliminary Injunction, which included an asset freeze and appointment of a receiver.  Pursuant to the Court’s orders, the Receiver is not authorized to pay any pre-receivership debts or obligations without further court order.  The government has alleged consumer injury of more than $43 million and the assets frozen to date are a fraction of this amount.  As such, the Receiver does not intend to seek an order to pay pre-receivership payroll.

The Receiver has received several inquiries concerning W-2s from former employees.  If you worked for Arete Financial Services, Paylocity, the payroll provider, will issue W-2s by January 31, 2020 via U.S. mail.  If your mailing address has changed, please email your new address to info@regulatoryresolutions.com with the subject line “ARETE – W-2 ADDRESS CHANGE”.

Notice to Employees – December 19, 2019

The Receiver’s staff will provide employees who complied with the TRO and completed a questionnaire, or who are now willing to complete a questionnaire, an opportunity to retrieve their personal items (e.g., photos, clothing, food, etc.) from the 1261 East Dyer Road, Santa Ana offices on Friday, December 20, 2019 from 3:00 p.m. – 5:00 p.m.

The Receiver’s staff will escort employees one at a time to his or her workspace to retrieve personal items.  Employees will not be allowed to remove any business records.

November 11, 2019 – Notice to All Clients Regarding Student Debt Relief Assistance

The companies listed below have been sued by the Federal Trade Commission for deceptive and unlawful practices.

The FTC’s lawsuit was filed on November 4, 2019, naming as Defendants all of the companies listed below, along with their principals.  The Court entered a Temporary Restraining Order (“TRO”) the same day, which prohibits any further unlawful conduct and appoints a Temporary Receiver to take possession and control of the business.  The Temporary Receiver has suspended operations and is now conducting a review of the business.  Copies of the FTC’s Complaint and TRO can be found in the Documents section of this webpage.

On November 18, 2019, the Court will hold a hearing to determine whether a Preliminary Injunction should be entered.  A Preliminary Injunction would extend the restrictions in the TRO until there is a trial of the case.

We recommend that you immediately contact your student loan servicer to confirm the status of your loan and that no third party is authorized to represent you in connection with your student loan account.  A list of approved student loan servicers can be found on the U.S. Department of Education website at:  https://studentloans.gov/myDirectLoan/additionalInformation.action.

At least until the date of the Preliminary Injunction hearing on November 18, 2019, these companies’ operations will remain suspended.  We will post regular updates to this website.  If you have additional questions, please send them to info@regulatoryresolutions.com.

Companies named in the Plaintiffs’ lawsuit:

  • American Financial Support Services Inc.
  • Arete Financial Group, also doing business as Arete Financial Freedom
  • Arete Financial Group LLC
  • CBC Conglomerate LLC, also doing business as 1file.org
  • Diamond Choice Inc., also doing business as Interest Rate Solutions
  • J&L Enterprise LLC, also doing business as Premier Solutions Servicing
  • La Casa Bonita Investments, Inc. formerly known as La Casa Bonita Investments LLC, also doing business as Education Loan Network, also doing business as Edunet
  • US Financial Freedom Center, Inc.

The principals of these companies are also named as Defendants in the lawsuit.  They include Carey G. Howe, Anna C. Howe, Shunmin “Mike” Hsu, Ruddy Palacios also known as Ruddy Barahona, Oliver Pomazi also known as Loc Phu, and Jay (Jagjeet) Singh.