The CFPB’s first publicly announced criminal referral has resulted in a nine-year sentence for the principal of a debt settlement company, who pled guilty to several of the charges. The referral, which was made to the U.S. Attorney for the Southern District of New York, arose out of the CFPB’s investigation of two debt-relief service providers and related entities and was announced by Director Cordray at a May 2013 press conference. In addition to his prison term, the principal was sentenced to three years of supervised release and ordered to pay $2.196 million in restitution and a fine of $15,000.
The CFPB has also named individuals as defendants in a number of other enforcement actions it has filed and Director Cordray has made statements indicating that the CFPB is committed to pursuing individuals, and not just companies, when exercising its enforcement authority. In addition, given that in announcing the CFPB’s first criminal referral Director Cordray stated that the CFPB would be looking for more opportunities “to coordinate and collaborate” with the U.S. Attorney, more criminal referrals by the CFPB of both companies and individuals can also be expected.