PDF Supreme Court of The State of New York

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------------------X THE PEOPLE OF THE STATE OF NEW YORK, by BARBARA D. UNDERWOOD, Attorney General of the State of New York,

Plaintiff,

COMPLAINT

-against-

DEBT RESOLVE, INC.; HUTTON VENTURES, LLC; PROGRESS ADVOCATES, LLC; PROGRESS ADVOCATES GROUP, LLC; STUDENT ADVOCATES, LLC; STUDENT ADVOCATES GROUP, LLC; STUDENT ADVOCATES TEAM, LLC; STUDENT LOAN CARE, LLC; STUDENT LOAN SUPPORT LLC; EQUITABLE ACCEPTANCE CORPORATION; BRUCE BELLMARE; and STANLEY E. FREIMUTH,

Index No. IAS Part ________________ Assigned to Justice ________

Defendants. ------------------------------------------------------------------------ X

TABLE OF CONTENTS INTRODUCTION ...............................................................................................................1 PARTIES .............................................................................................................................4

I. Corporate Defendants ..............................................................................................5 A. The Owner Defendants ......................................................................................5 B. The Contracting Defendants ..............................................................................6 C. The Marketing Defendants ................................................................................8 D. The Financing Defendant...................................................................................9

II. Individual Defendants ............................................................................................11 JURISDICTION ................................................................................................................11 FACTS ...............................................................................................................................12

I. Background on Student Debt-Relief and Forgiveness Programs ..........................12 II. Defendants' Unlawful and Deceptive Student Loan Debt-Relief

Business Practices ..................................................................................................15 A. Defendants' Unlawful and Deceptive Business Model ...................................15 B. Defendants' Unlawful Fee Structure ...............................................................17

i. Pre-Equitable Fee Structure.....................................................................18 ii. Defendants' Fee Structure Involving Equitable ......................................18 C. Defendants' Business Violates Credit Repair Laws ........................................19 D. Defendants' Business Violates Telemarketing Sales Laws .............................22 E. Equitable's Loans Violate New York's Usury Cap .........................................24 III. Defendants' Deceptive and Unlawful Marketing Practices ...................................24 A. Deceptive Internet Advertisements..................................................................25 B. Deceptive Direct Mail and Radio Solicitations ...............................................26

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C. Defendants' Further Deceptive Interactions with Borrowers ..........................30 IV. Other Fraudulent, Deceptive and Illegal Practices ................................................36 V. The Individual Defendants have Actual Knowledge of and/or Participate in the

Fraudulent, Illegal and Deceptive Acts ..................................................................37

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