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The operators of a student loan debt relief scheme will pay at least $835,000 to settle Â鶹´«Ã½ Trade Commission allegations that they charged illegal upfront fees and made false promises to consumers struggling with student loan debt.

The settlement resolves FTC litigation against Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi, five individuals who were named as defendants in the agency’s complaint against Arete Financial Group and several related companies.

In the complaint filed in 2019, the FTC alleged that Arete and the other defendants pretended to be affiliated with the 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 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. The order also requires the defendants’ full cooperation in this ongoing case and any related investigation.

The Commission vote approving the stipulated final order was 3-0-2, with Commissioners Rebecca Kelly Slaughter and Christine S. Wilson recorded as not participating. The FTC filed the proposed order in the U.S. District Court for the Central District of California.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.