‘I trusted him’: Student loan clients recount nightmare dealings with executive

When he counted up his monthly losses 1½ years later, Manuel Vildasol realized a single phone call nearly five years ago to reduce his monthly student loan payment had cost him nearly $2,500 in fees he unwittingly allowed a student loan debt relief company to withdraw from his bank account. And to make matters worse, today at 63 he still has about $75,000 in college loans to repay.

Vildasol, a former U.S. Marine, was a few months shy of turning 59 and working for a rural health care nonprofit in New Mexico when he called the American Financial Benefits Center in April 2014, a company founded and led by Sonoma County native Brandon Frere.

A month after Frere became the first person nationwide to be charged criminally in addition to being sued by the Federal Trade Commission in early 2018 as part of its two-year “Game of Loans” operation targeting student loan debt relief companies’ alleged deceptive tactics, the number of customers prosecutors say he’s duped and the scope of the financial hardship they’ve suffered has become clear.

Vildasol is only one of more than 40,000 people across the country allegedly deceived by AFBC and its two sister companies, Ameritech Financial and the Financial Education Benefits Center. Both also were run by Frere in Rohnert Park, according to court documents in the federal criminal case against him.

After earning master’s degrees in business administration and human resource management from the University of Phoenix, Vildasol had about $70,000 in student loan debt and was looking to reduce his $350 monthly college loan payment. A friend referred him to AFBC, telling him the company had helped him repay his college loan quicker for less money.

Vildasol spoke with an AFBC sales representative who told him he qualified for a federal program known as Public Service Loan Forgiveness. It would enable his loan to be forgiven if he consistently made monthly payments and continued working for a nonprofit for 10 years.

The sales representative told Vildasol he could immediately cut his monthly college loan payments by claiming more dependents, including his grandchildren he took care of on weekends. Vildasol was led to believe that after paying a fee to AFBC for a few months, his student loan payments would be reduced to $49.70 a month. He pressured Vildasol to sign documents electronically, 25 pages in total filled with nearly incomprehensible small print, while still on the phone with him.

The effects of signing those documents are still reverberating in Vildasol’s life. In a declaration to the FTC, the federal agency that accused Frere and his companies of engaging in deceptive and fraudulent business practices in the civil charges filed against them last year, Vildasol summed up his big mistake: “I trusted him.”

Federal authorities accused Frere and his student loan debt relief companies of collecting a variety of fees from customers with the promise of reducing the financial burden of their college loans. Instead, prosecutors claimed Frere and his companies did not deliver what they promised and swindled $28 million from student loan borrowers from 2014 to 2018. Of that total, they alleged Frere transferred $9 million to his personal bank accounts.

A federal judge in November took management control of the companies from Frere and placed them in the hands of an outside manager known as a receiver. The receiver froze the businesses’ assets and closed the companies at the end of November.

Thomas McNamara, the court-appointed receiver, indicated in a court filing in late December that Frere’s businesses won’t be reopened.

“We conclude that Defendants’ businesses cannot operate legally and profitably going forward,” McNamara wrote. “Deceptive and illegal practices are ingrained in, and are central to, the profitable operation of the business.”

Through his attorney, McNamara declined to comment for this story, citing the legal action against Frere. FTC investigators were unavailable last week for comment for this story, because they are furloughed indefinitely as a result of the government shutdown.

Feds move in on Frere

On Dec. 5, federal authorities arrested Frere at San Francisco International Airport as he was boarding a plane for Cancun with $3,000 in cash and blank company checks in his pockets. They charged him with wire fraud and jailed him.

After Frere had spent a few days in jail, a federal judge in San Francisco released him on $3 million bail, took his passport, required him to turn over 25 weapons and ordered him confined to his parents’ Sebastopol home while his case winds through federal court.

Frere’s lawyers, both in the criminal case and earlier civil case brought by the FTC, insist he did nothing wrong and his companies always were honest with customers. Frere is due back in court Feb. 27. His criminal defense attorney, Ed Swanson, said he and his client are “not at a place in the case where it makes a lot of sense to say things that are going to be out in the public record.” At Frere’s arraignment in December, Swanson told the federal judge Frere’s actions are defensible and characterized the criminal case as a dispute with federal prosecutors over how Frere “handles his money.”

But FTC filings in the civil case against Frere include declarations to the contrary by 10 of Frere’s former employees and nine former student loan customers. All of them, in one way or another, accused Frere of the same thing: orchestrating a scam.

Some of Frere’s customers were more fortunate than Vildasol, realizing earlier that their monthly payments to one of his companies were not being applied to repay their student loan debts.

Scott Belnap, of Riverton, Utah, first heard of Ameritech through a glowing review on a website called He called Ameritech in early April 2018 and decided to sign up for their loan debt relief services. Ameritech promised it could reduce his monthly college loan payments from about $1,400 to $175.56. He paid the company $700 upfront and agreed to an ongoing monthly fee of about $80 on top of the $175.56 he would send the firm each month to repay his loan.

Belnap, however, quickly sensed a problem: the money he was sending to Ameritech each month was not being forwarded to his student loan servicing company.

“They put my student loans on deferment and were collecting the amount of money that was going toward my student loans and none of it was going towards (the loan), so I was like, what the crap?” Belnap said in an interview.

About two weeks after signing up with Ameritech, an FTC investigator called Belnap to ask about his experiences with the company. After learning about and reading the FTC lawsuit against the company, he immediately decided to cancel his account with Ameritech. He never received a refund, and he said the FTC told him he’s probably never going to.

Past due on loan payments

Sean Emerson avoided losing any money to AFBC, though his involvement with the company still caused him significant trouble.

In December 2013, Emerson received a flyer in the mail from AFBC, and he signed up with the company a month later after it told him it could help him lower his student loan payments under a program called Income Based Repayment. Emerson said he did not realize he could apply for the program on his own, without AFBC’s help.

“When I received the AFBC mailer, my gut told me to be skeptical of the offer. I wish that I had listened to it. But, when you are in need, you are more vulnerable,” Emerson wrote in a customer declaration for the FTC.

Several months later, Emerson received a notice from his loan servicer that he was 60 days past due on his monthly payment, negatively affecting his credit score. Emerson immediately called AFBC and, after an extended argument with a sales representative, ended up on the phone with Frere himself.

“He seemed like a snake oil salesman, I guess,” Emerson said in an interview. “I didn’t like the feel I got talking to him. He was trying to be really syrupy and overly concerned and assure me that everything was going to be taken care of, that they would take care of the credit, which they did not.”

Emerson later learned AFBC never had withdrawn money from his bank account, so he didn’t directly lose any money to the company. But the negative credit report followed him and he said it took about 100 calls to his loan servicer to get the negative report removed from his credit history.

Loans placed in forbearance

None of Frere’s other eight customers that gave declarations to the FTC were harmed as much as Vildasol.

After Vildasol signed the documents provided by AFBC, the company began withdrawing money monthly, nearly $2,500 over a year and a half. He eventually realized none of it was going toward repaying his student loan.

Vildasol, now living in Albuquerque, New Mexico, is unemployed following a car wreck that left him unable to work - and college loan debt $5,000 more than the $70,000 he owed when he called AFBC nearly five years ago.

“You figure you miss the payments for a year and a half, plus interest. That turned into quite a few thousand that I lost,” he said in an interview.

Vildasol began receiving deliquency notices from FedLoan, the student loan servicer in charge of collecting his payments. He repeatedly contacted AFBC, and the company repeatedly assured him everything was fine.

Finally, in mid-2015, Vildasol called FedLoan. He learned his loans had been placed into forbearance, temporarily suspending his payments, and no payments had been made since he signed up with AFBC the year before. Adding insult to injury, AFBC had convinced Vildasol to unintentionally break the law by inflating his family size, he said. Vildasol had reported a family size of 11 by counting all of his adult children and grandchildren, none of whom lived at his home full time.

“They said, ‘No, you can’t do that, that’s illegal.’ … The first lady I spoke with over at FedLoan was not very nice. I said I don’t defraud anybody, I’m an honest citizen, I consider myself a patriot,” Vildasol said.

Vildasol said AFBC eventually refunded some of his money in exchange for signing a document waiving his right to future reimbursements from the company. He blamed his experiences with AFBC on “those individuals that are not very honest” in the student loan debt relief sector.

But, he said, he thinks the government deserves some blame for allowing it to happen. When he signed up with AFBC, he said, he thought it was a contractor working with the federal government. He wishes there was a federal resource to check whether a student loan-related company is doing business legitimately.

“I’m going to pay back my loan. I don’t want any handouts. I’m a veteran and I believe you have to do your part … but it’s important to have safeguards,” Vildasol said. “But there’s nothing, there’s nothing in place.”

Former employee speaks out

Frere has declined multiple interview requests from The Press Democrat since his arrest to tell his side of the story. And his family last month outside federal court in San Francisco after he was released on bail referred a Press Democrat reporter’s questions to Frere’s lawyer, Swanson. The attorney only would say he and his client look forward to presenting Frere’s case in court proceedings.

Frere’s former employee, Jayda Zemansky, who worked in the Ameritech sales department from 2015 to 2016, insisted in an interview the company was on the level and Frere was only trying to help his customers reduce their college loan payments.

“I want to make sure that Brandon’s name doesn’t keep getting dragged through the mud, because to me he was a great person,” Zemansky said.

Zemansky said Frere personally ensured company operations complied with federal law. The sales script was reviewed by an attorney to make certain everything said to prospective customers was legal. She also said Frere was a generous executive who would do almost anything to help his employees, and was extremely understanding when she had to take time off because of a personal issue.

“I don’t feel that I was doing anything wrong, I don’t think the company was doing anything wrong, and I sure as hell don’t believe Brandon would do anything that would put his employees in the situation they’re in now,” she said.

Zemansky blamed the federal government for putting Frere’s employees out of work in November.

Employees who worked until the court-appointed receiver closed Frere’s business empire a couple months ago told The Press Democrat they didn’t get their last paychecks.

McNamara, the receiver, said in a recent court filing that “after much encouragement” from him, Frere returned some of the money he took from corporate accounts to help cover employees’ payroll for their final days of work Nov. 19 to 29.

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