Bureau wants ‘deposits’ of $19 million refunded; firm was ‘not a bank,’ made other spurious claims, agency finds

Refunds of approximately $19 million to about 400 depositors would be forced on an investor and the company he ran under a proposal made public Thursday by the federal consumer financial protection agency.

According to the Consumer Financial Protection Bureau (CFPB), it has proposed a settlement with Loan Doctor, a Delaware financial services company operating in West Palm Beach, Fla., and New York City. The bureau alleged that Loan Doctor purported to offer customers a Healthcare Finance Savings CD account that would yield, according to the company, “the highest return of any savings product in the US.” The settlement also includes the firm’s founder, Edgar Radjabli, who the agency said was an officer of the firm and responsible for its management.

“Loan Doctor and Radjabli falsely represented that deposited funds would be used to originate loans for healthcare professionals, would be held in insured accounts or backed by cash alternatives, and would yield interest rates between 5% and 6.25%,” the bureau said in a release. The bureau alleges that those claims were all false, misleading, or inaccurate.

“If approved by the court, the proposed settlement would require the defendants to refund all the deposits made, including all interest due to consumers. The defendants would also pay a civil money penalty (CMP) and be permanently banned from engaging or assisting others in any deposit taking activities.”

The bureau said Radjabli has been separately charged by the Securities and Exchange Commission (SEC).

According to the bureau, starting in August 2019, Loan Doctor took upward of $19 million from at least 400 individuals who opened and deposited money into Loan Doctor’s “deceptively advertised savings product.” CFPB, however, noted that Loan Doctor was not a bank, and that depositors’ funds were invested in volatile securities or securities-backed investments. The bureau is seeking a refund of all the funds contributed by depositors.

The CMP, the bureau said, would total $391,530, with $241,530 to be remitted because “the defendants paid that amount in penalties to the SEC due to a similar action brought by that agency.”

The firm would also be barred from deposit-taking activities (including taking deposits or assisting others in doing so).

CFPB Takes $19 Million Action Against Loan Doctor and Edgar Radjabli for Offering Fake High-Yield Bank Accounts