Student Loan Debt Relief Scammers Sentenced

The Attorney General of California announced that a group of individuals involved in a student loan debt relief scam have been sentenced — three of them receiving jail time — and paying more than $330,000 in restitution to victims who were “preyed on” because they were struggling to repay their student loans.

Christopher Lyell was sentenced to 120 days in custody and ordered to repay $150,000, Bradley Hansen was sentenced to 180 days in custody and ordered to repay $150,000, Paul Rehmar was sentenced to 60 days in custody, Kevin Rathburn was ordered to pay an unknown amount in victim restitution, and Hoke Nagahori was ordered to pay $30,000 in victim restitution.

The defendants operated a company called Student Loan Debt Relief Department. They convinced individuals to pay an upfront fee of $1,300 by making $39 monthly payments. The defendants didn’t tell the individuals that what was being offered by Student Loan Debt Relief Department was already available for free through the Department of Education and the $39 payments were to repay a high-interest loan. Those payments were owed even if the individuals canceled the service. The defendants also allegedly use the Federal Student Aid website to illegally access student borrower records.

The defendants also “feigned association” with the Department of Education to gain the trust of students, according to the AG.

“Too many Californians are already living paycheck to paycheck, wondering how they are going to pay off their student loans while also paying for rent, utilities, and other everyday expenses,” said Attorney General Rob Bonta, in a statement. “The last thing they should have to worry about is predatory actors looking to turn a profit at their expense. Student Loan Relief Department’s scam operation was deliberate and damaging, but thanks to the efforts of our team and our federal partners, those involved are being held accountable.”

Along with being charged for grant theft, the defendants were also charged with unauthorized computer access and altering computer information.

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