Government Actions

Bureau of Consumer Financial Protection, Case No. 1:20-cv-05159 S.D. NY

UPDATE As of December 9, 2022:

A Stipulated Final Judgment and Order was issued as follows:

IT IS ORDERED that:
Defendants, whether acting directly or indirectly, are permanently banned from, and from Assisting Others in, offering, providing, participating in, advertising,marketing, promoting, offering for sale, or selling, any Deposit-Taking Activity.

IT IS FURTHER ORDERED that:
Defendants and their officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with them who have actual noticeof this Order, whether acting directly or indirectly, may not:
a. violate §§ 1031 and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531,5536(a)(1)(B); and
b. in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of any Consumer Financial Product or Service, may
not misrepresent, or Assist Others in misrepresenting, expressly or impliedly, any fact material to consumers, including but not limited to total costs and any material restrictions, limitations, or conditions.

IT IS FURTHER ORDERED that:
Defendants are ordered to provide Affected Consumers redress in the full amount Defendants received from consumers who purchased Defendants’ advertised Consumer Financial Products and Services, plus all interest due to consumers under the terms of the advertised Consumer Financial Product or Service purchased.

Defendants have represented to the Bureau that they accepted from consumers more than $19 million for Defendants’ Consumer Financial Products and Services. Defendants have further represented to the Bureau that they have already satisfied the obligation to provide redress under Paragraph 9 of this Order because they have already refunded the full amount received from consumers, plus all interest due to consumers under the advertised terms of those Consumer Financial Products and Services.

Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right.

IT IS FURTHER ORDERED that:
Within 30 days of the Effective Date, Defendants must submit to the Enforcement Director for review and non-objection a comprehensive written plan for providing the redress ordered in Paragraph 9 (“Redress Plan”).

IT IS FURTHER ORDERED that:
Defendants must retain, at their own expense, the services of an independent certified accounting firm (“Firm”), within 15 days after the Enforcement
Director’s non-objection pursuant to Paragraph 12, to determine compliance with the Redress Plan.

IT IS FURTHER ORDERED that:
Under § 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil money penalty is entered in favor of the Bureau and against Defendants Loan Doctor, LLC and Edgar Radjabli, jointly and severally, in the amount of $391,530. Under 12 U.S.C. § 5565(c)(4), the amount Defendants must pay will be remitted by $241,530 because of Defendants’ satisfaction of their obligation to pay that amount in penalties to the Securities and Exchange Commission for related conduct in SEC v. Radjabli et al., Civil Action No. 2:21-cv-01761 (D.S.C.).

IT IS FURTHER ORDERED that:
In the event of any default on Defendants’ obligations to make payments under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment and will immediately become due and payable.

IT IS FURTHER ORDERED that:
Defendants must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to a
dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendants; or a change in Defendants’ name or address. Defendants must provide this notice at least 30 days before the development or
as soon as practicable after learning about the development, whichever is sooner.

IT IS FURTHER ORDERED that:
Within 7 days of the Effective Date, each Defendant must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury.

IT IS FURTHER ORDERED that:
Defendant Loan Doctor, LLC and Defendant Radjabli, for any business for which he is a majority owner or which he directly or indirectly controls, must create, for at least 5 years from the Effective Date, all documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. Defendants must retain these documents for at least 5 years after creation and make them available to the Bureau upon the Bureau’s request.

IT IS FURTHER ORDERED that:
Unless otherwise directed in writing by the Bureau, Defendants must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “Bureau of Consumer Financial Protection v. Loan Doctor, LLC and Edgar Radjabli, Case No. 1:20 cv-05159-ALC” and send them contemporaneously to the following addresses:
a. by overnight courier or first-class mail:

Assistant Director for Enforcement
Consumer Financial Protection Bureau
ATTN: Office of Enforcement
1700 G St., NW
Washington, D.C. 20552

b. by email to:
Enforcement Compliance@cfpb.gov

IT IS FURTHER ORDERED that:
Defendants must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau.

Defendants must cooperate fully with the Bureau in this matter and in any investigation or litigation related to or associated with the conduct described in the Complaint. Defendants must provide to the Bureau truthful and complete information, evidence, and testimony.

IT IS FURTHER ORDERED that:
Within 14 days of receipt of a written request from the Bureau, Defendants must submit compliance reports or other requested information, which must be sworn under penalty of perjury, provide sworn testimony, or produce documents.

For purposes of this Section, the Bureau may communicate directly with Defendants, unless Defendants retain counsel related to these communications.

Defendants must permit Bureau representatives to interview any employee or other person affiliated with Defendants who have agreed to such an
interview regarding: (a) this matter; (b) anything related to or associated with the conduct described in the Complaint; or (c) compliance with this Order. The person interviewed may have counsel present.

Nothing in this Order will limit the Bureau’s lawful use of compulsory process under 12 C.F.R. § 1080.6.

IT IS FUTHER ODERED that:
Should Defendants seek to transfer or assign all or part of their operations that are subject to this Order, Defendants must, as a condition of sale, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Order.

IT IS FURTHER ORDERED that:
All pending motions are hereby denied as moot.
The Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.

LINK: https://ecf.nysd.uscourts.gov/doc1/127132474475

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UPDATE As of December 1, 2022:

CFPB Takes $19 Million Action Against Loan Doctor and Edgar Radjabli for Offering Fake High-Yield Bank Accounts

Radjabli placed customer funds in risky investment vehicles and crypto-assets, including the now-defunct Celsius Network

Consumer Financial Protection Bureau (CFPB) took action against Loan Doctor to resolve the CFPB’s claims that the company and its founder, Edgar Radjabli, broke the law by deceiving consumers into thinking they were depositing funds into a guaranteed return savings product within a commercial bank. Loan Doctor and Radjabli falsely represented that deposited funds would be used to originate loans for healthcare professionals, would be held in insured accounts or backed by cash alternatives, and would yield interest rates between 5% and 6.25%. If approved by the court, the proposed settlement would require the defendants to refund all the deposits made, including all interest due to consumers. The defendants would also pay a civil money penalty, and be permanently banned from engaging or assisting others in any deposit taking activities. Radjabli has been separately charged by the Securities and Exchange Commission (SEC).

My Loan Doctor, which does business as Loan Doctor, is a Delaware financial services company operating in West Palm Beach, Florida, and New York City. Loan Doctor purported to offer customers a Healthcare Finance Savings CD account that would yield, according to the company, “the highest return of any savings product in the US.” In addition to being its founder, Edgar Radjabli, was an officer of Loan Doctor and responsible for its management.

The CFPB alleges that Loan Doctor and Radjabli made several false, misleading, and inaccurate marketing representations in advertising Loan Doctor’s Healthcare Finance Savings CD account. Starting in August 2019, Loan Doctor took millions of dollars from at least 400 individuals who opened and deposited money into Loan Doctor’s deceptively advertised savings product.

The proposed settlement, if approved by the court, would require Loan Doctor and Radjabli to:

• Refund approximately $19 million to approximately 400 depositors: The defendants would have to return the money that each affected person deposited into a Loan Doctor Healthcare Finance High Yield CD account, and in a manner consistent with the advertised terms of the product – namely, the principal along with an average per year interest rate of about 6%.
• Stop engaging in deposit taking activities: The defendants would be permanently banned from engaging or assisting others in any deposit taking activities.
• Pay a $391,530 fine: The order would require defendants to pay a civil money penalty to the CFPB in the amount of $391,530. A portion of that penalty, $241,530, will be remitted because the defendants paid that amount in penalties to the SEC due to a similar action brought by that agency. The remainder of the penalty would be deposited into the CFPB’s victims relief fund.

LINK: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-19-million-action-against-loan-doctor-and-edgar-radjabli-for-offering-fake-high-yield-bank-accounts/

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As of July 6, 2020, Bureau of Consumer Financial Protection, Case No. 1:20-cv-05159

The Consumer Financial Protection Bureau (Bureau) today filed a lawsuit against My Loan Doctor LLC, a Delaware financial-services company operating in West Palm Beach, Florida and New York City and doing business as Loan Doctor (Loan Doctor), and its founder, Edgar Radjabli. The Bureau alleges that Loan Doctor and Radjabli made several false, misleading, and inaccurate marketing representations in advertising Loan Doctor's "Healthcare Finance (HCF) Savings CD Account," in violation of the Consumer Financial Protection Act's (CFPA) prohibition against deceptive acts or practices. As the Bureau's complaint alleges, starting in August 2019, Loan Doctor took more than $15 million from at least 400 consumers who opened and deposited money into Loan Doctor's deceptively advertised product.

The Bureau's complaint, filed in federal district court in the Southern District of New York, specifically alleges that Loan Doctor and Radjabli engaged in four separate deceptive acts or practices in violation of the CFPA.

Loan Doctor and Radjabli falsely represented that the money consumers deposited into Loan Doctor's HCF High Yield CD Accounts would be used to originate loans for healthcare professionals and that Loan Doctor, before making a loan, would have an investor lined up to purchase it after it was made; in fact, Loan Doctor never used the deposits to originate loans for healthcare professionals and never entered into a contract with a buyer or investor to purchase a loan.
Loan Doctor and Radjabli falsely represented that the money consumers deposited into Loan Doctor's HCF High Yield CD Accounts, when not being used to originate loans, would be held in an FDIC-insured account, an account insured by Lloyd's of London, or a "cash alternative" or "cash equivalent," and, further, that Loan Doctor would maintain a cash reserve in an amount "equivalent to" the amount consumers deposited; in fact, consumers' deposits were invested in actively traded securities or loaned, through a third party, to investors using individual stock portfolios as collateral.
Loan Doctor and Radjabli falsely represented that Loan Doctor was a commercial bank and that consumers' deposits were safe and comparable to a traditional savings account with a guaranteed return; in fact, Loan Doctor was not a commercial bank, and consumers' deposits were invested in volatile securities or securities-backed investments.
Loan Doctor and Radjabli falsely represented that Loan Doctor's HCF High Yield CD Accounts paid interest at rates between 5 percent and 6.25 percent in the years before 2019; in fact, Loan Doctor did not even begin taking consumer deposits until August 2019.

The Bureau seeks redress for consumers, an injunction, and the imposition of civil money penalties.

The complaint is not a finding or ruling that the defendants have violated the law.

A copy of the complaint filed in the United States District Court for the Southern District of New York is available here: https://files.consumerfinance.gov/f/documents/cfpb_loan-doctor_complaint_2020-07.pdf

https://www.consumerfinance.gov/about-us/newsroom/cfpb-files-suit-against-loan-doctor-edgar-radjabli-deceptive-acts-practices/

For more information, contact:
Consumer Financial Protection Bureau
1990 K St. N.W.
Washington, D.C. 20006
Phone: (855) 411-2372
https://www.consumerfinance.gov/about-us/contact-us/