(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

Mayor London Breed speaks at the grand opening of the Bayview Essential Services Hub at the Southeast Community Facility on Tuesday, Feb. 16, 2021. (Kevin N. Hume/S.F. Examiner)
San Francisco enters red COVID tier, indoor dining to resume

Museums and gyms can reopen with capacity limits

Cities including San Francisco, Oakland and Berkeley are calling for large grocery and drug store chains to pay employees hazard pay for working during the COVID-19 pandemic. (Shutterstock)
SF proposes $5 hazard pay law for grocery, drug store workers

San Francisco may soon join the growing number of cities requiring large… Continue reading

Hikers walk along a closed stretch of Twin Peaks Boulevard on Friday, Jan. 22, 2021. (Kevin N. Hume/S.F. Examiner)
SFMTA board to vote on future of Twin Peaks Boulevard

The proposal would keep Burnett Avenue gate closed to vehicles, open Portola Drive

Kindergarten teacher Jennifer Klein collects crayons from students in the classroom at Lupine Hill Elementary School on Monday, Nov. 9, 2020 in Calabasas, California. (Al Seib/Los Angeles Times/TNS)
Newsom, legislators strike deal to reopen California schools

Taryn Luna and John Myers Los Angeles Times Gov. Gavin Newsom and… Continue reading

A sign about proposed development of the bluff at Thornton State Beach in Daly City on Friday, Feb. 26, 2021. (Kevin N. Hume/S.F. Examiner)
Retreat center proposed at popular state beach

Daly City residents oppose construction on ocean bluffs

Most Read