Business ProfileforNexus Services, Inc.

BBB reports on known significant government actions involving business' marketplace conduct.

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On November 23, 2020 the Bureau of Insurance of the Virginia State Corporation Commission issued a Settlement Order against Nexus Services, Inc., Libre by Nexus Inc., Michael Paul Donovan, and Richard Edward Moore (Defendants).  Below is a summary of allegations:

1. Since approximately 2014 (the Relevant Period), the Defendants while unlicensed by the Bureau to transact the business of insurance, have solicited, negotiated, and ultimately sold through Libre by Nexus, Inc. surety insurance in the form of immigration bonds.

   At least 400 immigration surety bonds have been sold by the unlicensed Defendants in the Commonwealth of Virginia, totaling nearly $1 million in bond premiums.The unlicensed Defendants have profited from their immigration bond business by retaining a portion of the bond premiums, along with other fees in connection with the sale of the bonds.

2. By acting and continuing to act as insurance agents in soliciting, negotiating, and selling immigration surety bonds and profiting from such insurance activities through the Relevant Period, the unlicensed Defendants have violated 38.2-1822 of the Code of Virginia.

3. Though the Bureau alerted the unlicensed Defendants approximately 17 months ago about, and has since attempted to work with them to address, their violative conduct, the Defendants have taken no steps to come into compliance with the Code’s licensing requirements, have not filed any applications to become licensed, and have refused to cease their non-compliant and unlicensed insurance activities.The Bureau, accordingly, asserts that, in addition to penalties, a cease and desist order should be entered pursuant to 38.2-219 of the Code.

Under the Order, Defendants shall pay the sum of Four Hundred Twenty-Five Thousand Dollars ($425,000), jointly and severally, to the Treasurer of Virginia pursuant to § 12.1-15 and § 38.2-218(A)-(B) of the Code.

Defendants shall undertake the following actions to ensure compliance with the Code and Virginia's insurance laws and regulations: (a) Defendants and their employees will cease collecting, receiving, forwarding, remitting, or otherwise handling, as an intermediary or otherwise, any premium monies being paid by or on behalf of customers1 in Virginia for the placement of immigration surety bonds; (b) Defendants and their employees will cease collecting, receiving, or otherwise handling, as an intermediary or otherwise, any collateral payments by or on behalf of Virginia customers intended to secure their immigration surety bonds; (c) Defendants and their employees will cease being present for and/or involved in the negotiation of contracts with Virginia customers for the placement of immigration surety bonds; (d) Defendants and their employees will not otherwise engage in any actions that constitute procuring or financing premium monies on behalf of Virginia customers2; (e) If Defendants or their employees are contacted by either a Virginia resident or person present in Virginia seeking to contract Defendants' services, Defendants and their employees will first refer such person to a Virginia licensed bonding agent for the negotiation and transacting of an immigration surety bond and wait until the price and terms of the immigration surety bond have been determined without the involvement of Defendants before contracting with such person for any of Defendants' services; (f) Defendants will not accept any monetary commissions or other fees for referrals made to Virginia-licensed bonding agents or otherwise tied to immigration surety bond transactions; (g) Defendants will cease advertising in Virginia in any medium, method, or channel, unless said advertising clearly and conspicuously discloses that Defendants are not licensed in Virginia by the Bureau in any capacity and that Defendants are not legally authorized to sell products or provide services to their customers that constitute the business of insurance or surety bonds; (h) Defendants' written contracts, materials, and advertising shall clearly disclose (1) that Defendants are either not licensed in Virginia by the Bureau in any capacity or not licensed in any jurisdiction to conduct the business of insurance or surety bonds and (2) that Defendants are not legally authorized to sell products or provide services to their customers that constitute the business of insurance or surety bonds; (i) Defendants' contracts with Virginia customers shall clearly and conspicuously attest that all monies paid to Defendants are solely for products and services that do not constitute the business of insurance or surety bonds and that any relationship between a customer and Defendants is separate and distinct from the contractual relationship that customer has with any licensed bonding agent or surety company; (j) Defendants will cease requiring Virginia program participants enrolled after the effective date of this Settlement Order to wear GPS monitoring devices; and (k) Defendants will notify the Bureau by letter addressed to the Deputy Commissioner of the Agent Regulation Division, State Corporation Commission of Virginia, 1300 East Main Street, Richmond, Virginia 23219, if Defendants or any business entities or individuals affiliated with Defendants apply with the Bureau for a license to transact the business of insurance. (3) In addition to any continuing obligation to furnish records and other information requested by the Bureau pursuant to § 38.2-1809 of the Code, Nexus, Libre, and any business entities owned, controlled, or managed by Defendants that engage in the same business as Libre shall, for a period of thirty (30) months from the entry of this Settlement Order, submit to reasonable examination by the Bureau of all business records related to the Virginia business

BBB reports on known significant government actions involving business' marketplace conduct.

Attorney General Mark R. Herring announced February 22, 2021 that he has filed a lawsuit against Libre by Nexus (Libre) and its parent company, Nexus Services, alleging that the company preys on immigrants held in federal detention centers by offering to pay for their immigration bonds to secure their release, while concealing or misrepresenting the true nature and costs of its services. Libre charges large upfront fees and hefty monthly payments, which typically amount to thousands of dollars more than the face value of the bond. Libre also markets its services to the friends and family members of detainees, who are desperate to secure their loved one’s release and also pay some of the exorbitant fees. Joining Attorney General Herring in co-filing today’s lawsuit are the attorneys general of New York and Massachusetts, as well as the Consumer Financial Protection Bureau (CFPB). 

 
“Libre by Nexus has allegedly preyed on the vulnerabilities of terrified immigrants being held in federal detention centers, as well as their families and friends, for their own financial gain. Not only that, this company allegedly has forced its clients to wear GPS devices, essentially removing them from one prison but binding them to the business instead,” said Attorney General Herring. “Today’s lawsuit is the culmination of years of hard work my team and I have put into stopping Libre by Nexus’ egregious exploitation of immigrants in Virginia and around the country. I want to thank my colleagues in both New York and Massachusetts as well as at the Consumer Financial Protection Bureau for the partnership and collaboration on this important matter.” 
 
Libre by Nexus, which is headquartered in Virginia, has been on Attorney General Herring and his Consumer Protection Section’s radar for years. Since December 2017, the Office of Attorney General (OAG) has issued six civil investigative demands (CIDs) in connection with the Nexus investigation. In April 2018, after Nexus refused to produce necessary documents, OAG filed a Petition to Enforce CID against Nexus, which was granted in August of that year, after Nexus unsuccessfully tried to fight it. After completing an investigation, the OAG issued a Notice of Violation letter to Nexus identifying possible violations of the Virginia Consumer Protection Act and the Dodd-Frank Act. In December 2020, Virginia joined an amicus brief in opposition to a proposed class action settlement because it 1) provided minimal relief in exchange for overly broad releases of claims against Libre, 2) the attorneys’ fees to be awarded to plaintiff’s counsel were disproportionately high, and 3) the settlement did not provide adequate notice to consumers. 
 
The complaint, filed in the U.S. District Court for the Western District of Virginia, alleges that the defendants have violated and continue to violate several laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on deceptive and abusive acts and practices, as well as the states’ consumer protection laws. 
 
In particular, Attorney General Herring and his colleagues allege in the complaint that:
 
• Libre required consumers to sign confusing and misleading contracts that they present to consumers primarily in English, even though a vast majority of Libre’s clients do not speak or read English and do not understand it.
• Libre mischaracterizes its financial services as a “program” by boasting that it offers “wraparound services,” including free legal services. But, in reality, Libre provides nothing more than a referral to lawyers for its clients, who may receive no legal services at all. 
• Libre misleads consumers into believing that their monthly fees are paying down their bond as a debt owed to Libre and that portions will be refunded at the conclusion of their immigration proceedings. But, only later do many consumers discover that Libre will not refund thousands or tens-of-thousands of dollars in fees.
• To collect fees, Libre created the false impression that it has associations with U.S. Immigration and Customs Enforcement (ICE) or other government actors and that failing to pay fees to Libre can lead to arrest or deportation.
• Libre has placed GPS devices on clients that cannot be removed. The bulky device can cause physical harm and irritation and often fails to function.
 
Today’s lawsuit also names Libre’s principals — Micheal Donovan, Richard Moore, and Evan Ajin — who devised the company’s business model, implement it, direct its operation, and know the details of its workings.
 
The lawsuit seeks to put an end to the company’s illegal practices, obtain millions of dollars in restitution for the thousands of victims, and impose penalties on the companies.