CFPB and seven states sue a debt-relief network over $100 million in illegal fees
On 10 January 2024 the Consumer Financial Protection Bureau and the attorneys general of seven states sued StratFS, LLC (formerly Strategic Financial Solutions) and roughly thirty affiliated companies, alleging the enterprise collected more than $100 million in illegal advance fees since 2016 by routing customers to a network of affiliated "law firms" that did little actual legal work. A federal court granted a temporary restraining order the next day and a preliminary injunction in March 2024; a receiver now controls the business while the case proceeds toward a June 2026 hearing.
- Year
- 2024
- Where
- United States
- Outcome
- Ongoing
- Reported loss
- $100.0 million
- Victims
- Not stated in the sources
- Schemes
- Debt settlement scams
- Last reviewed
- 2026-09-10
The facts, as recorded
- Filed 10 January 2024 in the US District Court for the Western District of New York as CFPB, et al. v. StratFS, LLC, et al., No. 1:24-cv-00040, by the CFPB and the attorneys general of Colorado, Delaware, Illinois, Minnesota, New York, North Carolina and Wisconsin.
- Named defendants include StratFS, LLC, Strategic Family, Inc., roughly thirty affiliated "client services" LLCs and law firms, and individuals Ryan Sasson (CEO), Jason Blust, Daniel Blumkin and Albert Ian Behar.
- The complaint alleges the enterprise has collected more than $100 million in unlawful advance fees from consumers since at least 2016.
- Consumers were allegedly lured by mailers advertising debt consolidation loans; when they called and did not qualify for a loan, they were instead pitched a debt settlement programme.
- Customers were referred to an affiliated "law firm" the complaint says typically employed only one or two licensed attorneys to handle thousands of clients, most of whose work was done by non-attorneys.
- The complaint alleges fees were debited from customers' dedicated escrow accounts on a fixed schedule regardless of whether any debt had actually been settled, in violation of the Telemarketing Sales Rule's advance-fee ban.
- A federal court granted a temporary restraining order on 11 January 2024 and a preliminary injunction on 4 March 2024, appointing a receiver over the defendants' operations.
- CFPB Director Rohit Chopra: "The operators of this scheme established a network of shell companies and law firms to hide their illegal activities from law enforcement."
- North Carolina Attorney General Josh Stein: "North Carolinians were looking for help with their debts. Instead, they got scammed by these fraudulent law firms and lost even more money."
- As of mid-2026 the case remains pending against the defendants, with a hearing scheduled for 29 June 2026 in Rochester, New York.
Why this case matters
This is a live, large-scale civil case rather than a concluded criminal prosecution, and it shows how the same core play — advance fees, a “law firm” doing little law, telling people to stop paying their creditors — has scaled from a single company like Mission Settlement Agency into a network of roughly thirty affiliated entities collecting over $100 million.
The bait was a loan, not a settlement
Consumers responded to mailers about debt consolidation loans — a different, and generally more consumer-friendly, product than debt settlement. Only after they called and were told they didn’t qualify for a loan were they redirected to a debt settlement enrolment instead, according to the complaint.
A law firm with one or two lawyers for thousands of clients
The complaint alleges the affiliated “law firms” customers were referred to typically had only one or two licensed attorneys serving thousands of clients, with non-attorney staff doing most of the actual negotiating — the structure regulators say let the enterprise claim the credibility of legal representation without providing it.
The caveat
This case is ongoing. A court has issued a temporary restraining order, a preliminary injunction and appointed a receiver, but the allegations above are the CFPB’s and the state attorneys general’s claims in a pending civil complaint, not a final judgment, and the named defendants have not been found liable as of this page’s last review.
Sources
- StratFS, LLC f/k/a Strategic Financial Solutions, LLC, et al.. Consumer Financial Protection Bureau. Accessed 2026-09-10. Supports: The full list of corporate and individual defendants, the filing date and docket number, the $100 million figure, the debt-consolidation bait-and-switch, the escrow-account fee structure, and the TRO and preliminary injunction dates.
- CFPB and Seven State Attorneys General Sue Debt-Relief Enterprise, Strategic Financial Solutions, for Illegally Swindling More Than $100 Million from Financially Struggling Families. Consumer Financial Protection Bureau. Accessed 2026-09-10. Supports: The sham law firm structure, the states involved, the legal basis, and the Chopra quote.
- Attorney General Josh Stein, CFPB and Multistate Coalition Protect Consumers From Debt Relief Scam. North Carolina Department of Justice, Office of the Attorney General. Accessed 2026-09-10. Supports: North Carolina's role as a lead plaintiff and the Josh Stein quote.