Consumer Financial Protection Bureau et al v. Pension Funding, LLC et al, No. 8:2015cv01329 - Document 69 (C.D. Cal. 2016)
Court Description: STIPULATED FINAL JUDGMENT AND ORDER by Judge Josephine L. Staton as to Defendants Edwin Lichtig, Rex Hofelter and Pension Funding, LLC. Related to: Stipulation for Order, 63 . (nbo)
Download PDF
<![CDATA[
Consumer Financial Protection Bureau et al v. Pension Funding, LLC et al Doc. 69 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 9 10 11 12 Case No. 8:15-cv-01329-JLS-JCGx 13 Plaintiffs, 14 15 16 17 STIPULATED FINAL JUDGMENT AND ORDER AS TO DEFENDANTS EDWIN LICHTIG, REX HOFELTER, PENSION FUNDING, LLC, AND PENSION INCOME, LLC Consumer Financial Protection Bureau, et al., v. Pension Funding, LLC, et al., 18 Defendants. 19 20 The Consumer Financial Protection Bureau (Bureau) and Shirin Emami, 21 Acting Superintendent of Financial Services of the State of New York 22 (Superintendent)1, commenced this civil action on August 20, 2015, to obtain 23 injunctive, equitable, and monetary relief from Pension Funding, LLC (Pension 24 Funding), Pension Income, LLC (Pension Income), Steven Covey, Edwin Lichtig, 25 26 27 28 1 Acting Superintendent Emami succeeded Acting Superintendent Anthony J. Albanese on December 1, 2015 1 Dockets.Justia.com 1 and Rex Hofelter. The Complaint alleges violations of the Consumer Financial 2 Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5552(a)(1), 5531, 5536(a), 5564, 3 5565, and the laws of New York State. 4 Defendants Edwin Lichtig, Rex Hofelter, Pension Funding, and Pension 5 Income, by and through counsel, agree to the entry of this Proposed Stipulated 6 Final Judgment and Order (Order). 7 THEREFORE, it is ORDERED: FINDINGS AND CONCLUSIONS 8 9 10 11 1. This Court has jurisdiction over the parties and the subject matter of this action. 2. The Bureau, the Superintendent, and Defendants Lichtig, Hofelter, 12 Pension Funding, and Pension Income agree to entry of this Order, without 13 adjudication of any issue of fact or law, to settle and resolve all matters in dispute 14 arising from the conduct alleged in the Complaint, with respect to them, to the date 15 this Order is entered. 16 3. For the purposes of this Order, Defendants Lichtig, Hofelter, Pension 17 Funding, and Pension Income admit the facts necessary to establish the Court’s 18 jurisdiction over them and the subject matter of this action. 19 4. Defendants Lichtig, Hofelter, Pension Funding, and Pension Income 20 waive all rights to seek judicial review or otherwise challenge or contest the 21 validity of this Order. Defendants Lichtig, Hofelter, Pension Funding, and Pension 22 Income also waive any claim they may have under the Equal Access to Justice Act, 23 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this 24 Order. Each Party will bear its own costs and expenses, including without 25 limitation attorneys’ fees. 26 27 28 2 1 5. Defendants Lichtig, Hofelter, Pension Funding, and Pension Income 2 agree that there is good cause to appoint a permanent receiver over Pension 3 Funding, LLC, and Pension Income, LLC. 4 6. Entry of this Order is in the public interest. DEFINITIONS 5 6 7 8 9 The following definitions apply to this Order: 7. “Effective Date” means the date on which this Order is entered on the docket. 8. “Enforcement Director” means the Assistant Director of the Office 10 of Enforcement for the Consumer Financial Protection Bureau, or his or her 11 delegee. 12 9. “Executive Deputy Superintendent” means the Executive Deputy 13 Superintendent of the Financial Frauds & Consumer Protection Division of the 14 New York State Department of Financial Services, or his or her delegee. 15 10. “Pension-Advance Products or Services” means any product or 16 service that provides or arranges lump-sum payments to consumers in return for 17 their agreement to redirect all or part of their pension payments for some period to 18 repay the funds. 19 20 21 I. BAN ON PENSION-ADVANCE PRODUCTS AND SERVICES 11. IT IS ORDERED that Defendants Lichtig and Hofelter are 22 permanently restrained and enjoined from (1) offering, marketing, selling, 23 servicing, or providing any Pension-Advance Products or Services, whether 24 directly or indirectly, (2) assisting any person offering, marketing, selling, 25 servicing, or providing any Pension-Advance Products or Services, including, but 26 not limited to, by consulting, brokering, planning, investing, or advising, and (3) 27 receiving any monies or consideration from, holding any ownership interest in, 28 3 1 providing services to, or working in any capacity for any person engaged in or 2 assisting in the offering, marketing, selling, servicing, or providing of any Pension- 3 Advance Products or Services. II. 4 CONDUCT PROVISIONS AS TO NEW YORK 5 6 12. IT IS FURTHER ORDERED that Defendants Lichtig, Hofelter, 7 Pension Funding, and Pension Income are permanently restrained and enjoined 8 from (1) directly or indirectly offering, marketing, selling, servicing, or providing 9 any financial products or services in the State of New York or to consumers in the 10 State of New York that are not compliant with New York State law, or providing 11 any financial service or product without the requisite New York State license, (2) 12 assisting any person offering, marketing, selling, servicing, or providing any 13 financial products or services in the State of New York or to consumers in the State 14 of New York that are not compliant with New York State law by consulting, 15 brokering, planning, investing, advising or otherwise, or providing any financial 16 service or product without the requisite New York State license, and (3) receiving 17 any monies or consideration from, holding any ownership interest in, providing 18 services to, or working in any capacity for any person engaged in or assisting in the 19 offering, marketing, selling, servicing, or providing of any financial products or 20 services in the State of New York or to consumers in the State of New York that 21 are not compliant with New York State law, or providing any financial service or 22 product without the requisite New York State license. 23 13. Defendants Lichtig and Hofelter shall not purchase, distribute, 24 promote or otherwise cause to exist any New York State-specific advertisements, 25 endorsements, or other promotional materials for financial products or services that 26 are not compliant with New York State law. To the extent Defendant Lichtig or 27 Hofelter engages in any business activities that involve financial products or 28 4 1 services with national or regional advertising, including Internet advertising, if 2 such products and services are not compliant with New York State law, they must 3 clearly and conspicuously disclose in such advertising that the financial products 4 and services are not available in New York. 5 14. Defendants Lichtig, Hofelter, Pension Funding, and Pension Income 6 consent to the enforcement by the Superintendent of the provisions of ¶ 12 in a 7 New York federal court. 8 III. 9 MONETARY RELIEF 10 11 15. IT IS FURTHER ORDERED that Defendants Lichtig and Hofelter 12 must return to Pension Income, LLC, through the receivership estate established by 13 the appointment of the receiver in this matter, the following amounts: a. Defendant Lichtig must pay to the receivership estate $282,000 by 14 April 1, 2016; and 15 b. Defendant Hofelter must pay to the receivership estate $40,000 by 16 April 1, 2016. 17 IV. 18 ADDITIONAL MONETARY PROVISIONS 19 20 IT IS FURTHER ORDERED that, 21 16. In the event of any default on Defendant Lichtig’s or Defendant 22 Hofelter’s obligations to make payment under Section III of the Order, interest, 23 computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding 24 amounts not paid from the date of default to the date of payment, and will 25 immediately become due and payable. 26 27 28 17. Defendants Lichtig and Hofelter must relinquish all dominion, control, and title to the funds paid pursuant to ¶ 15 to the fullest extent permitted 5 1 by law and no part of the funds may be returned to either Defendant Lichtig or 2 Hofelter. Defendants Lichtig and Hofelter cannot use funds that properly belong to 3 Pension Income, LLC, or Pension Funding, LLC, to satisfy the requirements of ¶ 4 15. 18. 5 Under 31 U.S.C. § 7701, Defendants Lichtig and Hofelter, unless they 6 already have done so, must furnish to the Bureau taxpayer-identifying numbers, 7 which may be used for purposes of collecting and reporting on any delinquent 8 amount arising out of this Order. 19. 9 Under § 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C.§ 1681 10 b(a)(1), any consumer reporting agency may furnish a consumer report concerning 11 either Defendant Lichtig or Defendant Hofelter to the Bureau, which may be used 12 for purposes of collecting and reporting on any delinquent amount arising out of 13 this Order. 20. 14 Full compliance with Section III of this Order will satisfy Defendant 15 Lichtig’s and Defendant Hofelter’s obligations to pay the costs, fees, and expenses 16 of the receiver as set forth in Section VIII of the Stipulated Preliminary Injunction, 17 Appointment of Receiver, and Related Orders, entered by the Court on January 8, 18 2016. V. 19 APPOINTMENT OF PERMANENT RECEIVER 20 21 IT IS FURTHER ORDERED that, 22 21. Krista Freitag of E3 Advisors is appointed as the permanent receiver 23 of Pension Funding, LLC, and Pension Income, LLC, and their subsidiaries, 24 affiliates, and successors in interest. The permanent receiver shall have full powers 25 of an equity receiver consistent with the provisions of the Stipulated Preliminary 26 Injunction, Appointment of Receiver, and Related Orders, entered by the Court on 27 January 8, 2016, including but not limited to, full power over all funds, assets, 28 6 1 negotiable instruments, collateral, premises (whether owned, leased, occupied, or 2 otherwise controlled), choses in action, books, records, papers and other real or 3 personal property, including notes, deeds of trust and other interests in real 4 property, belonging to, being managed by, or in the possession of or control of 5 Pension Funding, LLC, Pension Income, LLC, and any of their subsidiaries, 6 affiliates, or successors in interest, and including all funds and assets transferred 7 from Pension Funding, LLC, or Pension Income, LLC, to entities controlled or 8 managed by Edwin Lichtig or Rex Hofelter, such as PGR, LLC, and any other 9 entity determined by the Court to be part of the receivership. 10 22. Defendants Lichtig and Hofelter must relinquish control of, ownership 11 claims to, and any other interests in Pension Funding, LLC, and Pension Income, 12 LLC, and any of their subsidiaries, affiliates, or successors in interest, including all 13 funds and assets transferred from Pension Funding, LLC, or Pension Income, LLC, 14 to entities controlled or managed by Edwin Lichtig or Rex Hofelter, such as PGR, 15 LLC, and any other entity determined by the Court to be part of the receivership, 16 including any claims to records, information, documents, assets, bank accounts, 17 negotiable instruments, collateral, books, records, papers, notes, deeds of trust and 18 other interests in real property, or other property of any receivership entity. VI. 19 COOPERATION WITH THE RECEIVER 20 21 IT IS FURTHER ORDERED that, 22 23. Defendants Lichtig and Hofelter and their agents, servants, 23 employees, attorneys, affiliates, and those persons in active concert or participation 24 with any of them, who receive actual notice of this Order, by personal service or 25 otherwise, must cooperate with the receiver by giving the receiver access to and 26 control of all records, information, documents, assets, bank accounts, negotiable 27 28 7 1 instruments, collateral, books, records, papers, notes, deeds of trust and other 2 interests in real property, or other property of any receivership entity. 3 24. Defendants Lichtig and Hofelter, and their agents, servants, 4 employees, attorneys, affiliates, and those persons in active concert or participation 5 with any of them, who receive actual notice of this Order, by personal service or 6 otherwise, must cooperate with the receiver as necessary to assist the receiver in 7 determining the identity and location of, and the amount of injury sustained by any 8 person affected by Defendants’ Pension-Advance Product or Services. Defendants 9 must make available or turn over to the receiver such information in their or their 10 agents’ possession or control within 14 days of receiving a written request from the 11 receiver. 12 13 14 25. Neither Defendant Lichtig nor Defendant Hofelter may bring any claim against any receivership entity. 26. Neither Defendant Lichtig nor Defendant Hofelter may bring any 15 claim against a consumer for payments related to Pension-Advance Products or 16 Services. VII. 17 CONSUMER INFORMATION 18 19 27. IT IS FURTHER ORDERED that Defendants Lichtig and Hofelter 20 and their agents, servants, employees, attorneys, affiliates, and all persons who are 21 in active concert or participation with any of them, who have actual notice of this 22 Order, whether acting directly or indirectly, may not disclose, use, benefit from 23 consumer information, sell any customer information or leads to others, or use 24 customer information or leads collected through their pension-advance business, 25 including the name, address, telephone number, email address, Social Security 26 number, other identifying information, or any data that enables access to a 27 consumer’s account (including information related to a credit card, bank account, 28 8 1 pension account, or other financial account, and including any bank accounts used 2 by any Defendant to receive a consumer’s pension payments), that Defendants 3 obtained or created in connection with Pension-Advance Products or Services. 4 Notwithstanding this prohibition, the Defendants must provide information about 5 consumers to the receiver and may disclose such information: a) to the Bureau; b) 6 to the Superintendent; c) to another government agency; or d) as required by law, 7 regulation, or court order, to the extent such information is in possession, custody, 8 or control of either Defendant Lichtig or Hofelter. VIII. 9 REPORTING REQUIREMENTS 10 11 IT IS FURTHER ORDERED that, 12 28. For 10 years from the Effective Date, Defendants must notify the 13 Bureau and the Superintendent of any development that may affect compliance 14 obligations arising under this Order, including but not limited to, a dissolution, 15 assignment, sale, merger, or other action that would result in the emergence of a 16 successor company; the creation or dissolution of a subsidiary, parent, or affiliate 17 that engages in any acts or practices subject to this Order; the filing of any 18 bankruptcy or insolvency proceeding by or against any Defendant; or a change in 19 any Defendant’s name or address. Each Defendant must provide this notice, if 20 practicable, at least 30 days before the development, but in any case no later than 21 14 days after the development. 29. 22 23 24 Within 7 days of the Effective Date, Defendants Lichtig and Hofelter must: a. designate at least one telephone number and email, physical, and 25 postal address as points of contact, which the Bureau or the 26 Superintendent may use to communicate with each Defendant; 27 28 9 1 b. identify all businesses for which either Defendant is the majority 2 owner, or that any Defendant directly or indirectly controls, by 3 providing all of those businesses’ names, telephone numbers, and 4 physical, postal, email, and Internet addresses; c. describe the activities of each business identified in (b), including the 5 6 products and services offered, and the means of advertising, 7 marketing, and sales; and d. describe in detail the relevant Defendant’s involvement in any 8 business for which he performs services in any capacity or which he 9 10 either wholly or partially owns, including the relevant Defendant’s 11 title, role, responsibilities, participation, authority, control, and 12 ownership. 13 30. For 10 years from the Effective Date, each Defendant must report any 14 change in the information required to be submitted under ¶ 29 at least 30 days 15 before the change or as soon as practicable after learning about the change, 16 whichever is sooner. 17 31. Within 90 days of the Effective Date, and again one year after the 18 Effective Date, Defendants must submit to the Enforcement Director and the 19 Superintendent an accurate written compliance progress report (Compliance 20 Report), which, at a minimum: a. describes in detail the manner and form in which the Defendant has 21 complied with this Order; and 22 b. attaches a copy of each Order Acknowledgment obtained under 23 24 Section IX, unless previously submitted to the Bureau and the 25 Superintendent. 26 27 28 32. After the one-year period, and continuing for 9 years, Defendants must submit to the Enforcement Director and the Superintendent additional 10 1 Compliance Reports within 14 days of receiving a written request from the Bureau 2 or the Superintendent. IX. 3 ORDER DISTRIBUTION AND ACKNOWLEDGMENT 4 5 IT IS FURTHER ORDERED that, 6 33. Within 7 days of the Effective Date, each Defendant must submit to 7 the Enforcement Director and the Superintendent an acknowledgment of receipt of 8 this Order, sworn under penalty of perjury. 9 34. Within 30 days of the Effective Date, each Defendant, for any 10 business for which the Defendant is the majority owner or directly or indirectly 11 controls, must deliver a copy of this Order to each of its board members and 12 executive officers, as well as to any managers, employees, service providers, or 13 other agents and representatives who have responsibilities related to the subject 14 matter of this Order. 15 35. For 5 years from the Effective Date, each Defendant, for any business 16 for which the Defendant is a majority owner or directly or indirectly controls, must 17 deliver a copy of this Order to any business entity resulting from any change in 18 structure referred to in Section VIII, any future board members and executive 19 officers, as well as to any managers, employees, service providers, or other agents 20 and representatives who will have responsibilities related to the subject matter of 21 the Order before they assume their responsibilities. 22 36. Defendants must secure a signed and dated statement acknowledging 23 receipt of a copy of this Order, ensuring that any electronic signatures comply with 24 the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of 25 delivery, from all persons receiving a copy of this Order under this Section. 26 X. 27 RECORDKEEPING 28 11 IT IS FURTHER ORDERED that, 1 37. 2 Each Defendant must create, for at least 10 years from the Effective 3 Date, all documents and records necessary to demonstrate full compliance with 4 each provision of this Order, including for any business in which either Individual 5 Defendant is a majority owner or directly or indirectly controls, as well as all 6 submissions to the Bureau. 38. 8 9 10 Defendants must retain the documents identified in ¶ 37 for at least 5 39. 7 Defendants must make the documents identified in ¶ 37 available to years. the Bureau or the Superintendent upon request. XI. 11 NOTICES 12 13 40. IT IS FURTHER ORDERED that, unless otherwise directed in 14 writing by the Bureau or the Superintendent, Defendants must provide all 15 submissions, requests, communications, or other documents relating to this Order 16 in writing, with the subject line, “CFPB, et al. v. Pension Funding, et al., No. 2013- 17 0790-02,” and send them either: 18 19 20 21 22 23 24 a. By overnight courier (not the U.S. Postal Service) to the below addresses and contemporaneously by email, as follows: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 I Street, NW Washington, DC 20006 Enforcement_Compliance@cfpb.gov 25 26 and 27 28 12 Executive Deputy Superintendent Financial Frauds & Consumer Protection New York State Department of Financial Services ATTENTION: Anna MacCormack, Assistant Counsel 1 State Street New York, NY 10004 1 2 3 4 5 FFCPD_Enforcement@dfs.ny.gov; or 6 b. By first class mail to the below addresses and contemporaneously by email to: 7 8 Assistant Director for Enforcement Consumer Financial Protection Bureau ATTN: Office of Enforcement 1700 G Street, NW Washington, DC 20552 9 10 11 12 13 Enforcement_Compliance@cfpb.gov 14 and 15 19 Executive Deputy Superintendent Financial Frauds & Consumer Protection New York State Department of Financial Services ATTENTION: Anna MacCormack, Assistant Counsel 1 State Street New York, NY 10004 20 FFCPD_Enforcement@dfs.ny.gov. 16 17 18 21 XII. 22 23 COOPERATION WITH THE BUREAU AND THE SUPERINTENDENT 24 IT IS FURTHER ORDERED that, 25 41. If necessary, Defendants Lichtig and Hofelter must cooperate fully to 26 help the Bureau or the Superintendent determine the identity and location of, and 27 the amount of injury sustained by, any person affected by Defendants’ Pension- 28 13 1 Advance Product or Services. Defendants must make available or turn over to the 2 Bureau or the Superintendent such information in their or their agents’ possession 3 or control within 14 days of receiving a written request from the Bureau. 4 42. Defendants Lichtig and Hofelter must cooperate fully with the Bureau 5 or the Superintendent in this matter and in any investigation related to or associated 6 with the conduct described in the Complaint. Defendants must provide truthful and 7 complete information, evidence, and testimony. These Defendants must appear for 8 interviews, discovery, hearings, trials, and any other proceedings that the Bureau or 9 the Superintendent may reasonably request upon 5 days written notice, or other 10 reasonable notice, at such places and times as the Bureau or the Superintendent 11 may designate, without the service of compulsory process. XIII. 12 COMPLIANCE MONITORING 13 14 15 16 IT IS FURTHER ORDERED that, to monitor Defendant Lichtig’s and Defendant Hofelter’s compliance with this Order, 43. Within 14 days of receipt of a written request from the Bureau or the 17 Superintendent, the given Defendant must submit additional compliance reports or 18 other requested information, which must be made under penalty of perjury; provide 19 sworn testimony; or produce documents. 20 44. For purposes of this Section, the Bureau or the Superintendent may 21 communicate directly with either Defendant Lichtig or Hofelter, unless that 22 Defendant retains counsel related to these communications. 23 45. The given Defendant must permit Bureau or Superintendent 24 representatives to interview any employee or other person affiliated with the 25 Defendant who has agreed to such an interview. The person interviewed may have 26 counsel present. 27 28 14 1 46. Nothing in this Order will limit the Bureau’s or the Superintendent’s 2 lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or New York 3 state law, or other compulsory process. XIV. 4 RETENTION OF JURISDICTION 5 6 7 47. The Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. 8 9 10 11 12 DATED: February 10, 2016 _______________________________ United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
