(Courtesy photo)

(Courtesy photo)

Financial services CEO arrested at SFO on federal fraud charges

The owner of a financial services enterprise has been arrested and charged in federal court in San Francisco with fraud in connection with an alleged scheme to steal millions of dollars from people trying to repay student loans.

Brandon Frere, 41, of Sonoma County, was arrested at San Francisco International Airport Tuesday night as he attempted to board a flight to Cancun, Mexico, according to U.S. Attorney’s Office spokesman Abraham Simmons.

Frere was charged with one count of wire fraud in a criminal complaint filed under seal Tuesday and unsealed after his initial appearance before a federal magistrate on Wednesday.

FBI Agent Christopher Bognanno said in an affidavit accompanying the complaint that he believed Frere, who has allegedly stashed $7 million in bank accounts in Andorra and Luxembourg, may have been preparing to flee the country.

Frere is in custody and will reappear before U.S. Magistrate Sallie Kim in San Francisco on Monday for a detention hearing and identification of his defense lawyer.

The fraud charge would carry a sentence of up to 20 years in prison, if Frere is convicted.

Between 2011 and 2015, Frere established three companies that purported to help borrowers, for a fee, to prepare documents seeking student loan forgiveness or reduction. The companies are American Financial Benefits Center, Ameritech Financial, and Financial Education Benefits Center. They took in more than $28 million between 2014 and early 2018, according to the complaint.

The complaint alleges that Frere and the companies misrepresented the victims’ legal ability to reduce their loans and misrepresented structure and purpose of fees they charged. It claims that company agents encouraged borrowers to pay enrollment and monthly membership fees to the education center and obscured the fact that those fees were not related to debt repayment.

Bognanno wrote, “Frere targeted recipients of federal student loans who were often struggling to make payments and devised a scheme to steal millions of dollars from them for the benefit of himself and his family members.”

The criminal investigation came after the Federal Trade Commission filed a civil consumer fraud lawsuit against Frere and the companies in February.

In the civil case, U.S District Judge Saundra Brown Armstrong of Oakland issued a preliminary injunction on Nov. 29 barring Frere and the companies from offering debt relief services, collecting fees, or taking control of any assets.

Armstrong said Frere and the companies had engaged in “deceptive and abusive acts.” She also appointed a receiver for the companies.

Bognanno said in the complaint that Frere was told on Nov. 29 that Armstrong was about to issue an injunction. He then allegedly transferred $400,000 out of three company bank accounts 45 minutes before the injunction was issued. The money went to accounts for himself, his family and his lawyers, Bognanno said.

-Julia Cheever, Bay City NewsCrime

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

San Francisco Police Chief Bill Scott leaves the scene of an officer-involved shooting at Brannan Street and Jack London Alley in the South Park area on Friday, May 7, 2021. (Kevin N. Hume/S.F. Examiner)
Chief Scott issues rare apology to man shot by SF police

Officer says he ‘did not intend for his firearm to go off’

Despite the pandemic, San Francisco has ended the fiscal year with a budget surplus. (Kevin N. Hume/S.F. Examiner)
Better than expected tax revenues leave city with $157.3M surplus for this year

As the fiscal year nears an end and Mayor London Breed prepares… Continue reading

Passengers board a BART train bound for the San Francisco Airport at Powell Street station. (Kevin N. Hume/S.F. Examiner)
BART bumps up service restoration to August 30, offers fare discounts

Rail agency breaks pandemic ridership records, prepares to welcome more passengers

Ashley and Michelle Monterrosa hold a photo of their brother Sean Monterrosa, who was killed by a Vallejo police officer early Tuesday morning, as they are comforted at a memorial rally at the 24th Street Mission BART plaza on Friday, June 5, 2020. (Kevin N. Hume/S.F. Examiner)
State Department of Justice to investigate Sean Monterrosa shooting by Vallejo police

Attorney General Rob Bonta steps in after Solano County DA declines case

Gov. Gavin Newsom, show here speaking at the City College of San Francisco mass vaccination site in April, faces a recall election due to anger on the right over his handling of the pandemic, among other issues. (Kevin N. Hume/S.F. Examiner)
Why Gavin Newsom’s popularity could work against him in the recall election

Top pollster: ‘We’re not seeing the Democrats engaged in this election. And that may be a problem…’

Most Read