Attorney General Ellison sues debt-relief company for illegally swindling over $100 million from families struggling with debt

AG Ellison joins the CFPB and six other attorneys general in filing the lawsuit against Strategic Financial Solutions

January 22, 2024 (SAINT PAUL) – Attorney General Keith Ellison joined the Consumer Financial Protection Bureau (CFPB) and six other attorneys general in suing Strategic Financial Solutions (SFS) and its network of shell companies for running an illegal debt-relief scheme. SFS operated a web of faux law firms and shell companies to collect hundreds of millions in illegal fees from vulnerable consumers. The coalition of attorneys general and the CFPB filed suit under seal on January 10, 2024 and are requesting the court to stop the illegal scheme, return money to consumers, and impose a monetary penalty on all those involved in the scheme. The coalition also sued the architects of the scheme, Ryan Sasson and Jason Blust.

“Consumers came to Strategic Financial Solutions for help getting out of debt and instead of receiving that help, they were ripped off,” said Attorney General Ellison. “Preying on people in debt is as reprehensible as it gets. I am glad to be partnering with the Consumer Financial Protection Bureau and other attorneys general to put a stop to Strategic Financial Solutions’ illegal and unethical behavior and return money to the people they scammed.”

“The operators of this scheme established a network of shell companies and law firms to hide their illegal activities from law enforcement,” said CFPB Director Rohit Chopra. “The CFPB and state attorneys general are seeking to shut down this outfit's illegal activity.”

Strategic Financial Solutions markets itself as providing debt relief services. It has offices in New York City and Buffalo, New York. Ryan Sasson is the chief executive officer of SFS. SFS sits at the top of a web of shell companies and façade law firms, which are controlled by Sasson and fellow scheme architect Jason Blust.

The primary façade law firm that SFS allegedly used to scam Minnesotans is Northstar Legal Group. However, Minnesotans also signed up for debt relief services with several other façade law firms, including Bedrock Legal Group, Boulder Legal Group, Canyon Legal Group, Heartland Legal Group, Option 1 Legal, Pioneer Law Firm, Rockwell Legal Group, Summit Law Firm, and Whitestone Legal Group.

SFS runs an alleged scheme, involving dozens of entities, to dupe consumers and regulators. The company uses third parties to target financially vulnerable consumers with advertisements. The advertisements lead consumers to believe they may qualify for loans to help pay down debts. When consumers call the advertised number, SFS employees answer. Though not offering the advertised loans, SFS encourages consumers to enroll in its debt-relief services. SFS promises that its network of law firms and lawyers will negotiate lower debt amounts.

SFS provides little, if any, debt-relief services. SFS requires customers to make immediate payments into an escrow account. Long before it settles any debts, however, SFS collects the fees from the escrow account. While the illegal fees and false claims of legal assistance leave consumers worse off, Sasson and Blust pad their pockets through their web of shell companies that siphon the fees from the escrow accounts.

Attorney General Ellison, the CFPB, and the six other attorneys general allege the actions of SFS violate the Telemarketing Sales Rule. Specifically, the complaint alleges that SFS harms consumers by:

• Charging illegal, advance fees: SFS charges and collects fees before any of a consumer’s debts have been settled. SFS charges pre-determined fee amounts without any connection to actual settlements or debt-relief savings. Since 2016, SFS and its façade firms have collected over $100 million from consumers.
• Falsely claiming lawyers will provide debt relief: SFS leads consumers to think that contracted law firms will negotiate lower payoff amounts. However, the firms serve as a façade, and SFS and its employees, who are not lawyers, conduct the debt-relief negotiations, if any take place.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against nonbank financial institutions, including debt-relief companies, for violating consumer financial protections laws and rules, including the Telemarketing Sales Rule. The lawsuit seeks to stop SFS’s alleged unlawful conduct, require SFS to make harmed consumers whole, and require SFS to pay a civil money penalty, which would be deposited in the CFPB’s victims relief fund.

The CFPB and States filed their complaint and requested a temporary restraining order and preliminary injunction in the U.S. District Court for the Western District of New York on January 10, 2024. The court granted the request for a temporary restraining order on January 11, 2024.

Read the complaint filed on January 10, 2024.

The six states joining with Minnesota and the CFPB are Colorado, Delaware, Illinois, New York, North Carolina, and Wisconsin.  

Attorney General Ellison urges Minnesota consumers to report their concerns with debt-relief companies or other institutions by submitting a complaint online.  Minnesota consumers may also contact the Attorney General’s Office by calling (651) 296-3353 (Metro), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).

Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.