Bureau of Consumer Financial Protection et al v. Consumer Advocacy Center Inc. et al, No. 8:2019cv01998 - Document 298 (C.D. Cal. 2021)
Court Description: STIPULATED FINAL JUDGMENT AND ORDER AS TO RELIEF DEFENDANT JUDY DAI by Judge Michael W. Fitzgerald. A judgment for monetary relief is entered in favor of Plaintiffs and against Settling Relief Defendant as follows: Settling Relief Defendant shall be liable to the Bureau and the People of the State of California for: the liquidation value of the Light Street Asset up to but not exceeding $3,000,000. SEE ORDER FOR DETAILS. (iv)
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Bureau of Consumer Financial Protection et al v. Consumer Advocacy Center Inc. et al Doc. 298 1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 CENTRAL DISTRICT OF CALIFORNIA 12 13 CASE NO. 8:19-cv-01998 MWF (KS) Bureau of Consumer Financial Protection, et al., STIPULATED FINAL JUDGMENT AND ORDER AS TO RELIEF DEFENDANT JUDY DAI 14 Plaintiffs, 15 16 17 18 19 v. Consumer Advocacy Center Inc., d/b/a Premier Student Loan Center, et al., Court: Hon. Michael W. Fitzgerald Courtroom 5A Defendants. 20 21 22 23 STIPULATED FINAL JUDGMENT AND ORDER AS TO RELIEF DEFENDANT JUDY DAI Plaintiffs the Bureau of Consumer Financial Protection (Bureau), the 24 State of Minnesota, the State of North Carolina, and the People of the State of 25 California (collectively, Plaintiffs) commenced this civil action on October 21, 26 2019, filed an amended complaint on February 24, 2020, and a second amended 27 complaint (Second Amended Complaint) on April 20, 2021, to obtain 28 1 STIPULATED FINAL JUDGMENT AND ORDER Dockets.Justia.com 1 permanent injunctive relief, damages, rescission or reformation of contracts, 2 refunds of moneys paid, restitution, disgorgement or compensation for unjust 3 enrichment, civil money penalties, and other monetary and equitable relief 4 from: (1) Defendants Consumer Advocacy Center Inc., d/b/a Premier Student 5 Loan Center; True Count Staffing Inc., d/b/a SL Account Management; Prime 6 Consulting LLC, d/b/a Financial Preparation Services; TAS 2019 LLC, d/b/a 7 Trusted Account Services; Horizon Consultants LLC; First Priority LLC, d/b/a 8 Priority Account Management; Albert Kim; Kaine Wen in his individual 9 capacity and as trustee of the Kaine Wen 2017 Trust; and Tuong Nguyen; and 10 (2) Relief Defendants Infinite Management Corp., f/k/a Infinite Management 11 Solutions Inc.; Hold the Door, Corp.; TN Accounting Inc.; Mice and Men LLC; 12 Sarah Kim; 1st Generation Holdings, LLC; Anan Enterprise, Inc.; and Judy Dai 13 in her individual capacity and as trustee of the Judy Dai 2017 Trust. 14 The Second Amended Complaint alleges violations of sections 1031(a) 15 and 1036(a) of the Consumer Financial Protection Act of 2010 (CFPA), 12 16 U.S.C. §§ 5531(a), 5536(a); the Telemarketing and Consumer Fraud and Abuse 17 Prevention Act (TCFAPA), 15 U.S.C. § 6102(c)(2), based on alleged violations 18 of the Telemarketing Sales Rule (TSR), 16 C.F.R. pt. 310; the Minnesota 19 Prevention of Consumer Fraud Act (MNPCFA), Minn. Stat. §§ 325F.68-.694; 20 the Minnesota Uniform Deceptive Trade Practices Act (MNUDTPA), Minn. 21 Stat. §§ 325D.43-.48; the North Carolina Debt Adjusting Act (NCDAA), N.C. 22 Gen. Stat. § 14-423 et seq.; the North Carolina Telephonic Seller Registration 23 Act (NCTSRA), N.C. Gen. Stat. § 66-260 et seq.; the North Carolina Unfair and 24 Deceptive Practices Act (NCUDPA), N.C. Gen. Stat. § 75-1.1; and the 25 California Unfair Competition Law (CAUCL), Cal. Bus. & Prof. Code § 17200 26 et seq. in connection with the above-named defendants’ marketing and sale of 27 debt-relief services. The Second Amended Complaint also includes claims for 28 2 STIPULATED FINAL JUDGMENT AND ORDER 1 avoidance of fraudulent transfers under the Federal Debt Collection Procedures 2 Act, 28 U.S.C. §§ 3001-3308, and the California Uniform Voidable 3 Transactions Act, Cal Civ. Code §§ 3439-3439.14. 4 The Plaintiffs and Relief Defendant Judy Dai (Settling Relief Defendant) 5 agree to entry of this Stipulated Final Judgment and Order (Order), without 6 adjudication of any issue of fact or law, to settle and resolve any claims 7 Plaintiffs might bring against Settling Relief Defendant either: (1) under the 8 CFPA, TCFAPA, TSR, MNPCFA, MNUDTPA, NCDAA, NCTSRA, 9 NCUDPA, and CAUCL related to the student loan debt relief operation 10 described in the Second Amended Complaint; or (2) based on the transfers 11 alleged at Paragraphs 220- 223, 227, 246, and 250 of the Second Amended 12 Complaint. 13 THEREFORE, IT IS ORDERED: 14 FINDINGS 15 1. 16 of this action. 17 2. This Court has jurisdiction over the parties and the subject matter Settling Relief Defendant neither admits nor denies the allegations 18 in the Second Amended Complaint, except as specifically stated herein. For 19 purposes of this Order, Settling Relief Defendant admits the facts necessary to 20 establish the Court’s jurisdiction over Settling Relief Defendant and the subject 21 matter of this action. 22 3. Settling Relief Defendant waives all rights to seek judicial review 23 or otherwise challenge or contest the validity of this Order and any claim she 24 may have under the Equal Access to Justice Act, 28 U.S.C § 2412, concerning 25 the prosecution of this action to the date of this Order. Each Party agrees to bear 26 its own costs and expenses, including, without limitation, attorneys’ fees. 27 4. Entry of this Order is in the public interest. 28 3 STIPULATED FINAL JUDGMENT AND ORDER 1 2 3 DEFINITIONS The following definitions apply to this Order: 5. “Affected Consumers” includes any consumer who paid 4 Defendants or their officers, agents, servants, employees, or attorneys for any 5 Debt-Relief Service from November 2, 2015, to October 23, 2019. 6 6. “Assets” means any legal or equitable interest in, right to, or claim 7 to any real, personal, or intellectual property owned or controlled by, or held, in 8 whole or in part for the benefit of, or subject to access by any Defendant or 9 Relief Defendant, wherever located, whether in the United States or abroad. 10 This includes, but is not limited to, chattel, goods, instruments, equipment, 11 fixtures, general intangibles, effects, leaseholds, contracts, mail or other 12 deliverables, shares of stock, commodities, futures, inventory, checks, notes, 13 accounts, credits, receivables (as those terms are defined in the Uniform 14 Commercial Code), funds, cash, and trusts. 15 7. “Bureau” means the Bureau of Consumer Financial Protection. 16 8. “Defendants” means Corporate Defendants and Individual 17 Defendants, individually, collectively, or in any combination, and each of them 18 by whatever names each might be known; 19 a. 20 Inc., True Count Staffing Inc., Prime Consulting LLC, TAS 2019 21 LLC, Horizon Consultants LLC, and First Priority LLC, 22 collectively, or in any combination, and their successors and 23 assigns, and each of them by any other names by which they might 24 be known, including South Coast Financial Center, Direct Account 25 Services, Financial Loan Advisors, Account Preparation Services, 26 Administrative Financial, Tangible Savings Solutions, Coastal 27 Shores Financial Group, First Choice Financial Centre (a/k/a First “Corporate Defendants” means Consumer Advocacy Center 28 4 STIPULATED FINAL JUDGMENT AND ORDER 1 Choice Financial Center), Administrative Account Services, 2 Primary Account Solutions, Prime Document Services, Financial 3 Accounting Center, Doc Management Solutions, ALW Loans, 4 Administrative Accounting Center, Best Choice Financial Center, 5 First Document Services, Global Direct Accounting Solutions, 6 Keystone Document Center, Pacific Palm Financial Group, Pacific 7 Shores Advisory, Sequoia Account Management, Signature Loan 8 Solutions, Yellowstone Account Services, ClearStudentLoanDebt, 9 Clear Student Loan Debt, Trusted Account Services, Premier 10 Student Loan Center, and Priority Account Management; 11 b. 12 King; Kaine Wen, a/k/a Wenting Kaine Dai, Wen-Ting Dai, Wen 13 Ting Dai, Kaine Dai, and Kaine Wen Dai, in his individual 14 capacity and as trustee of the Kaine Wen 2017 Trust; and Tuong 15 Nguyen, a/k/a Tom Nelson, collectively, or in any combination, 16 and each of them by any other names by which they might be 17 known; 18 c. 19 Prime Consulting LLC, TAS 2019 LLC, Horizon Consultants 20 LLC, and First Priority LLC, collectively, or in any combination, 21 and their successors and assigns; 22 d. “Individual Defendants” means Albert Kim, a/k/a Albert “Receivership Defendants” means True Count Staffing Inc., “Relief Defendants” means: 23 i. 24 Management Solutions Inc.; Hold the Door, Corp.; TN 25 Accounting Inc.; Mice and Men LLC; 1st Generation 26 Holdings, LLC; and Anan Enterprise, Inc., collectively, or in 27 any combination, and their successors and assigns, and each Infinite Management Corp., f/k/a Infinite 28 5 STIPULATED FINAL JUDGMENT AND ORDER 1 of them by any other names by which they might be known; 2 and 3 ii. 4 and as trustee of the Judy Dai 2017 Trust, and any other 5 names by which each of them might be known. 6 9. Sarah Kim and Judy Dai, in her individual capacity “Debt-Relief Service” means any program or service represented, 7 directly or by implication, to renegotiate, settle, or in any way alter the terms of 8 payment or other terms of the debt between a consumer and one or more 9 unsecured creditors or debt collectors, including but not limited to, a reduction 10 in the balance, interest rate, or fees owed by a consumer to an unsecured 11 creditor or debt collector. 12 10. 13 the Court. 14 11. “Effective Date” means the date on which this Order is entered by “Enforcement Director” means the Assistant Director of the Office 15 of Enforcement for the Bureau of Consumer Financial Protection, or his or her 16 delegate. 17 12. “Light Street Asset” means the investment in the Light Street 18 Argon, L.P Series A2 A/O fund that Settling Relief Defendant currently holds 19 in an investment account, account number ending in 50 2X, in the name of the 20 Judy Dai 2017 Trust at UBS Financial Services Inc. 21 13. “Person” means an individual, partnership, company, corporation, 22 association (incorporated or unincorporated), trust, estate, cooperative 23 organization, or other entity. 24 14. “Plaintiffs” means the Bureau of Consumer Financial Protection, 25 the State of Minnesota, the State of North Carolina, and the People of the State 26 of California, collectively, or in any combination. 27 28 6 STIPULATED FINAL JUDGMENT AND ORDER 1 15. “Related Consumer Action” means a private action by or on behalf 2 of one or more consumers or an enforcement action by another governmental 3 agency brought against Settling Relief Defendant based on substantially the 4 same facts as described in the Second Amended Complaint. 5 16. “Settling Relief Defendant” means Relief Defendant Judy Dai in 6 her individual capacity and as trustee of the Judy Dai 2017 Trust, and any other 7 names by which she may be known. 8 MONETARY PROVISIONS 9 I 10 Order to Pay Redress 11 12 13 It is FURTHER ORDERED that: 17. A judgment for monetary relief is entered in favor of Plaintiffs and against Settling Relief Defendant as follows: 14 a. Settling Relief Defendant shall be liable to the Bureau and the 15 People of the State of California for: 16 i. the liquidation value of the Light Street Asset up to but not exceeding $3,000,000; 17 ii. if the liquidation value of the Light Street Asset is less than 18 19 $3,000,000, Settling Relief Defendant will be additionally 20 liable for the difference between the liquidation value of the 21 Light Street Asset and $3,000,000, up to but not exceeding 22 $500,000; and b. Settling Relief Defendant shall be liable to all Plaintiffs for 23 $88,381.80. 24 25 26 27 18. In satisfaction of the judgment as ordered in Paragraph 17, Settling Relief Defendant: a. must, within ten days of the Effective Date, pay to the Bureau, by 28 7 STIPULATED FINAL JUDGMENT AND ORDER 1 wire transfer to the Bureau or the Bureau’s agent, and according 2 to the Bureau’s wiring instructions, $88,381.80; and 3 b. hereby grants to the Bureau all rights and claims that Settling 4 Relief Defendant has to $3,000,000 worth of the Light Street 5 Asset as set forth in Paragraphs 17 and 20, and shall forfeit any 6 rights to this asset. 7 19. Within five business days of entry of this Order, Settling Relief 8 Defendant must instruct UBS Financial Services Inc. to liquidate the Light 9 Street Asset in accordance with the applicable investment terms and to the 10 extent that notice to liquidate the Light Street Asset has not already been 11 provided in a manner consistent with Paragraph VII.A of the Preliminary 12 Injunction issued on November 15, 2019 (ECF No. 103). 13 20. Within ten business days of liquidation of the Light Street Asset 14 and of receipt of a copy of this Order by any means, including but not limited to 15 via facsimile or email, UBS Financial Services Inc. shall transfer to the Bureau 16 or its designated agent the entire proceeds of the Light Street Asset liquidation, 17 up to but not exceeding $3,000,000. If UBS Financial Services Inc. transfers 18 less than $3,000,000 to the Bureau under this Section, Settling Relief Defendant 19 must transfer to the Bureau the difference between the amount UBS Financial 20 Services Inc. transferred and $3,000,000, up to but not exceeding $500,000. 21 Settling Relief Defendant must make this transfer to the Bureau within five 22 business days of UBS Financial Services Inc. transferring the proceeds of the 23 Light Street Asset liquidation to the Bureau. UBS Financial Services Inc. and 24 Settling Relief Defendant shall make all transfers required by this Paragraph to 25 the Bureau or the Bureau’s designated agent according to the Bureau’s wiring 26 instructions. 27 28 8 STIPULATED FINAL JUDGMENT AND ORDER 1 2 3 21. Settling Relief Defendant shall be wholly responsible for all taxes, fees, and costs associated with liquidation of the Light Street Asset. 22. Any funds received by the Bureau in satisfaction of this judgment 4 will be deposited into a fund or funds administered by the Bureau or to the 5 Bureau’s agent according to applicable statutes and regulations to be used for 6 redress for Affected Consumers, including but not limited to refund of moneys, 7 restitution, damages or other monetary relief, and for any attendant expenses for 8 the administration of any such redress. 9 23. If the Bureau determines, in its sole discretion, that providing 10 redress to consumers is wholly or partially impracticable or if funds remain 11 after the administration of redress is completed, the Bureau will deposit any 12 remaining funds in the U.S. Treasury as disgorgement. Settling Relief 13 Defendant will have no right to challenge the Bureau’s choice of remedies 14 under this Section, and will have no right to contest the manner of distribution 15 chosen by the Bureau. 16 17 24. Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. 18 II 19 Additional Monetary Provisions 20 21 It is FURTHER ORDERED that: 25. In the event of any default on Settling Relief Defendant’s 22 obligations to make payment under this Order, interest, computed under 28 23 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid 24 from the date of default to the date of payment, and will immediately become 25 due and payable. 26 26. 27 Settling Relief Defendant relinquishes all dominion, control, and title to the funds and all other Assets transferred or paid under this Order to the 28 9 STIPULATED FINAL JUDGMENT AND ORDER 1 fullest extent permitted by law and no part of the funds or other Assets may be 2 returned to Settling Relief Defendant. 3 27. The facts alleged against Settling Relief Defendant in the Second 4 Amended Complaint will be taken as true and given collateral estoppel effect, 5 without further proof, in any proceeding based on the entry of the Order, or in 6 any subsequent civil litigation by or on behalf of the Plaintiffs, including in a 7 proceeding to enforce their rights to any payment or monetary judgment under 8 this Order, such as a non-dischargeability complaint in any bankruptcy case. 9 28. The facts alleged in the Second Amended Complaint establish all 10 elements necessary to sustain an action by the Plaintiffs under section 11 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and for such 12 purposes this Order will have collateral estoppel effect against Settling Relief 13 Defendant, even in her capacity as a debtor-in-possession. 14 29. Under 31 U.S.C. § 7701, Settling Relief Defendant, unless she has 15 already done so, must furnish to Plaintiffs any taxpayer-identification numbers 16 associated with her, which may be used for purposes of collecting and reporting 17 on any delinquent amount arising out of this Order. 18 30. Within thirty days of the entry of a final judgment, order, or 19 settlement in a Related Consumer Action, Settling Relief Defendant must notify 20 the Enforcement Director of the final judgment, order, or settlement in writing. 21 That notification must indicate the amount of redress, if any, that the Settling 22 Relief Defendant paid or is required to pay to consumers and describe the 23 consumers or classes of consumers to whom that redress has been or will be 24 paid. 25 26 27 28 10 STIPULATED FINAL JUDGMENT AND ORDER 1 III 2 Lifting of Asset Freeze 3 4 It is FURTHER ORDERED that: 31. The freeze on the Assets listed in Paragraphs 17-20 is modified to 5 permit the payments and other transfers of Assets identified in Section I of this 6 Order. Upon completion of all payments and other obligations identified in 7 Section I of this Order, the freeze of the Assets listed at Paragraphs 17-20 and 8 of the Assets held in the Judy Dai 2017 Trust account ending in 50 2X at UBS 9 Financial Services Inc. pursuant to the Preliminary Injunction entered on 10 November 15, 2019 (ECF No. 103), shall be dissolved. 11 COMPLIANCE PROVISIONS 12 IV 13 Reporting Requirements 14 15 It is FURTHER ORDERED that: 32. Within seven days of the Effective Date, Settling Relief Defendant 16 must designate at least one telephone number and email, physical, and postal 17 address as points of contact, which Plaintiffs may use to communicate with her. 18 33. For five years from the Effective Date or until such time as a final 19 judgment is entered as to Defendant Kaine Wen, whichever is longer, Settling 20 Relief Defendant must report any change in the information required to be 21 submitted under Paragraph 32 at least 30 days before the change or as soon as 22 practicable after learning about the change, whichever is sooner. 23 34. Until such time as a final judgment is entered as to Defendant 24 Kaine Wen and he has fully complied with all monetary provisions of such 25 judgment, Settling Relief Defendant must report, within seven days of the end 26 of each quarter, any Asset that Defendant Wen transfers to or provides for 27 Settling Relief Defendant’s benefit, directly or indirectly, if the aggregate value 28 11 STIPULATED FINAL JUDGMENT AND ORDER 1 of such transfers exceeds $500 for that quarter, including: 2 a. a detailed description of the nature of the asset transferred; 3 b. the value or estimated value of the asset transferred, including all 4 applicable measures of its value (e.g., currency denomination and 5 amount, appraisal, acquisition value, estimate in dollars); and 6 c. a description of how the asset was transferred, including 7 identifying the names of all individuals, the financial institution 8 and accounts, and all other identifying information associated 9 with each transfer. 10 V 11 Recordkeeping 12 13 It is FURTHER ORDERED that: 35. Settling Relief Defendant must create and maintain, for at least 5 14 years from the Effective Date or until such time as a final judgment is entered 15 as to Defendant Kaine Wen, whichever is longer, the following records: 16 a. All documents and records necessary to demonstrate full 17 compliance with each provision of this Order, including all 18 submissions to the Bureau; and 19 b. All documents and records pertaining to any transfer Settling 20 Relief Defendant must report under Paragraph 34 of this Order. 21 Settling Relief Defendant must make these documents available to any 22 Plaintiff upon the Plaintiff’s request. 23 VI 24 Notices 25 26 27 It is FURTHER ORDERED that: 36. Unless otherwise directed in writing by the Bureau, Settling Relief Defendant must provide all submissions, requests, communications, or other 28 12 STIPULATED FINAL JUDGMENT AND ORDER 1 documents relating to this Order in writing, with the subject line, “CFPB, et al., 2 v. CAC, et al., Case No. 8:19-cv-01998-MWF-KS” and send them by overnight 3 courier or first-class mail to the below address and contemporaneously by email 4 to Enforcement_Compliance@cfpb.gov: 5 Assistant Director for Enforcement 6 Bureau of Consumer Financial Protection 7 ATTENTION: Office of Enforcement 8 1700 G Street N.W. 9 Washington, D.C. 20552 10 37. Unless otherwise directed by a representative of the State of 11 Minnesota in writing, all submissions to the State of Minnesota pursuant to this 12 Order must be sent by overnight courier or first-class mail to the below address 13 and contemporaneously by email to evan.romanoff@ag.state.mn.us: 14 Evan Romanoff, Assistant Attorney General 15 Office of the Minnesota Attorney General 16 445 Minnesota Street, Suite 1200 17 St. Paul, Minnesota 55101 18 38. Unless otherwise directed by a representative of the State of North 19 Carolina in writing, all submissions to the State of North Carolina pursuant to 20 this Order must be sent by overnight courier or first-class mail to the below 21 address and contemporaneously by email to lweaver@ncdoj.gov: 22 M. Lynne Weaver, Special Deputy Attorney General 23 North Carolina Department of Justice 24 114 W. Edenton Street 25 Raleigh, North Carolina 27603 26 27 39. Unless otherwise directed by the State of California in writing, all submissions to the State of California pursuant to this Order must be sent by 28 13 STIPULATED FINAL JUDGMENT AND ORDER 1 overnight courier or first-class mail to the below address and 2 contemporaneously by email to christina.tusan@lacity.org: 3 Christina Tusan 4 Supervising Deputy City Attorney 5 Los Angeles City Attorney’s Office 6 200 N. Main Street, 5th Floor 7 Los Angeles, CA 90012 8 VII 9 Cooperation with Plaintiffs 10 11 It is FURTHER ORDERED that: 40. Settling Relief Defendant must cooperate fully with Plaintiffs in 12 this matter and in any investigation or litigation related to or associated with the 13 conduct described in the Second Amended Complaint. Settling Relief 14 Defendant must provide truthful and complete information, evidence, and 15 testimony. Settling Relief Defendant must appear for interviews, discovery, 16 hearings, trials, and any other proceedings that any Plaintiff may reasonably 17 request upon ten days written notice, or other reasonable notice, at such places 18 and times as Plaintiff may designate, without the service of compulsory process. 19 41. Settling Relief Defendant must cooperate fully to help Plaintiffs 20 determine the identity, location, and contact information of any Defendant and 21 any Person who might have contact information for any Defendant, and the 22 identity and location of Assets of any Defendant. Settling Relief Defendant 23 must provide such information in her or her agents’ possession or control within 24 fourteen days of receiving a written request from any Plaintiff. 25 26 27 28 14 STIPULATED FINAL JUDGMENT AND ORDER 1 VIII 2 Compliance Monitoring 3 It is FURTHER ORDERED that, to monitor Settling Relief Defendant’s 4 compliance with this Order: 5 42. Within fourteen days of receipt of a written request from any 6 Plaintiff, Settling Relief Defendant must submit the requested information, 7 which must be made under penalty of perjury; provide sworn testimony; or 8 produce documents. 9 43. For purposes of this Section, Plaintiffs may communicate directly 10 with Settling Relief Defendant, unless the Settling Relief Defendant retains 11 counsel related to these communications. 12 IX 13 Retention of Jurisdiction 14 15 16 It is FURTHER ORDERED that: 44. The Court will retain jurisdiction of this matter for the purpose of enforcing this Order. 17 18 It is SO ORDERED, this 15th day of June, 2021. 19 20 _________________________________ 21 MICHAEL W. FITZGERALD 22 United States District Judge 23 24 25 26 27 28 15 STIPULATED FINAL JUDGMENT AND ORDER
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