Healey, feds sue over alleged immigration bond scam
Complaint says company has 'cheated immigrants' released from ICE detention
ATTORNEY GENERAL Maura Healey and two other state AGs joined the federal Consumer Financial Protection Bureau in its first major watchdog action under the Biden administration, accusing an immigration bond provider of predatory behavior.
Healey, along with New York Attorney General Letitia James, Virginia Attorney General Mark Herring, and the federal consumer protection agency sued Libre by Nexus, its parent company, and the firm’s owners, Michael Donovan, Richard Moore, and Evan Ajin, in a Virginia federal court.
They’re accusing the defendants of misrepresenting the company and its conditions for helping immigrant detainees leave the custody of US Immigration and Customs Enforcement on bond.
The company, which bills itself as a “bail bond services” firm, offers to post bond for the detainee through a third party. After being released, the immigrant pays hundreds of dollars per month to eventually cover the full bond amount and another $420 a month fee for an electronic ankle monitor the company uses to keep track of the person it’s helping release.
“Today’s action should serve as notice to the entire market that financial scams targeting communities of color will not be tolerated,” said the consumer protection bureau’s acting director, Dave Uejio, during a Monday press call.
The company denies all the allegations in the suit.
ICE can release non-citizens held in its custody if an immigration judge has set a bond. Release can be secured by a cash payment to ICE in the full amount of the bond, which is refundable when the person’s immigration proceedings are finally resolved. Detainees without the ability to pay cash for their bond, —averaging $7,500 nationally —must obtain third-party financing to pay for the bond in cash, get bonded by a surety company, or remain in detention.
Virginia-based Libre arranges detainees’ release through third-party bond agents. That third party pays the amount of the bond and the immigrants pay back Libre in monthly installments. Neither Nexus Services, Libre’s parent company, nor Libre itself are licensed bail bond agents in any states. Cash bond is a requirement of immigration court, and it must be made in full, unlike standard bond.
Consumers believe, according to the complaint, that Libre has paid cash for their bond, creating a debt that must be repaid to Libre through an upfront fee and subsequent monthly payments. Plaintiffs said Libre’s efforts to collect monthly payments include making “false threats to take legal action, sell accounts into collection, and report consumers to credit bureaus.” They also said that the company threatens to re-detain or deport consumers for nonpayment.
“Libre by Nexus categorically denies all allegations in the complaint filed against the company today and looks forward to our day in court. Libre commits to continuing to service its amazing family of clients,” said Donovan, the company president and CEO, in an emailed statement.
Three of 17 counts in the suit include violations of Massachusetts consumer protection and fair debt collection laws against deceptive and abusive tactics. Healey alleges Libre demanded payments of debt that were never actually due, and that the company hasn’t responded to consumer disputes about certain debts and collection activities.
Healey’s office said the situation impacts “hundreds” of ICE detainees in the state.
From at least 2014 until at least late 2017, Libre used a multi-part, written client agreement of over 20 pages, all written in English except for a single page written in Spanish, resulting in thousands of people signing the agreement without knowing what it was entirely comprised of, said the attorneys general. Among several things not noted in Spanish, they said, is that the $420 monthly payments are leasing a GPS device, not actually paying their immigration bonds. None of those payments are refundable. Payments are often not tracked, according to the complaint, and refunds for payments toward bond (those unrelated to the GPS bracelets) are often not issued.
The suit alleges that immigrants are told that any damage to the GPS device will result in a felony criminal prosecution, even though the company has no authority to prosecute a crime and in most jurisdictions where Libre operates, destruction of such a device would not be a felony.
Healey said one immigrant told her office that she was paying thousands of dollars a month in fees and then found out the funds weren’t going toward her bond at all.
“She felt trapped and she felt cheated. She thought she couldn’t do anything about it because Libre told her that the agreement was tied to the immigration case and she would get in trouble with the immigration judge,” said Healey.
Another man was told that he had to wear a broken GPS bracelet for two years because ICE mandated it, when in fact, the monitoring devices are not part of any government order but are used by Libre to keep tabs on the former detainees. The man, whose case Healey’s office is investigating, struggled to make payments and the company allegedly harassed his family members, threatening to ruin their credit or take them to court if they didn’t get him to pay up.
Libre also tells its clients that their accounts will be turned over to collection agencies if they don’t pay, but the company has never actually done so, the suit says.
The attorneys general and CFRB are seeking millions of dollars in restitution for thousands of current and former Libre clients, and other relief.
Libre by Nexus expressed confidence it will prevail at trial.
“While we have fought to release tens of thousands of immigrants from detention, especially during the last four years, the AGs have taken time and money to investigate our company,” said Donovan.
He accused the AGs and federal consumer agency of conducting “a shadowy investigation into the only company helping the immigrants they claim to be protecting.” Donovan said that the complaint merely “rehashes” allegations the company has successfully defended in other legal actions.
Libre by Nexus has settled several lawsuits, including one in December in which Virginia’s Bureau of Insurance claimed that the company acted as an unlicensed insurance agency. A similar settlement was reached in California worth more than $5 million.
The lawsuit is the consumer bureau’s first public enforcement action under the new administration, which is hoping to reverse many of former President Trump’s immigration policies and enforcement priorities.