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Surety company tricked immigrants into wearing ‘chains’ and paying to have them removed

The Consumer Financial Protection Bureau alleges a company tricked American immigrants into wearing electronic tracking bracelets and paying thousands of dollars in fees in hopes of having them removed.

A lawsuit announced Monday by the agency, joined by the attorneys general of Massachusetts, New York and Virginia, claims that the company Libre by Nexus, for years, has “attacked” immigrants detained in centers. federal detention. Libre’s main activity, according to the complaint, is to offer the money detainees need – often close to $ 10,000 – as bail to secure their release pending trial, which can often take up to three years. .

In return, Libre demanded that customers wear what it says are GPS tracking bracelets and pay a monthly fee of $ 420, the CFPB says.


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In reality, the bracelets often did not have working GPS capabilities, the government said. The lawsuit also alleges that Libre customers often thought the fees they were paying were going to the original bond, when in fact none of the payments were.

Libre’s bonds, which the lawsuit said were paid for by third parties, were reimbursed by the government when Libre customers returned for their trials. Libre’s fees have translated into an annual interest rate of around 57% on its bail loans, which many of its clients have struggled to pay, according to the complaint.

The lawsuit also states that Libre often threatened to “detain or deport consumers for non-payment,” even though, as a private company unrelated to the government, it did not have the authority to do so.

“Libre ensures that these vulnerable immigrants are prevented from realizing the American dream from the start,” CFPB interim director Dave Uejio said on a call with reporters on Monday.

Libre acts as an intermediary between immigrants and bond slaves – not as an actual moneylender – and levies an unfairly high fee for this service, he added. “Today’s action should show that financial scams that target immigrants and deepen the ethnic and racial divide in America will not be tolerated,” Uejio said.

The CFPB and prosecutors in Massachusetts, New York and Virginia also sued Nexus CEO Mike Donovan, along with two other executives at the company.

In a statement to CBS MoneyWatch, Donovan said his company “categorically denies” the CFPB and state allegations. “Libre by Nexus is committed to fighting for immigrants scarred by the torture of” civilian “immigration detention,” Donovan said. “As we have fought to free tens of thousands of immigrants from detention, especially over the past four years, the [attorneys general] took time and money to investigate our business. “

Donovan also said his company “takes pride in its work and believes that sunlight is the best disinfectant. We plan to vigorously defend this lawsuit and prevail in the trial.”


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Nexus was founded in 2013 by Donovan and her husband Richard Moore, also named in the costume. Donovan and Moore said they were inspired to launch Libre, which means free in Spanish, because of their own experiences. Both have spent time behind bars after being convicted of writing bad checks. Court filings showed the company’s annual profits more than doubled over the past decade to $ 60 million, as President Donald Trump redoubled his efforts to stop immigrants.

In a call with reporters Monday, Virginia Attorney General Mark Herring said the federal government lawsuit against Nexus had been ongoing for years and the company’s misconduct dates back to at least 2014. In July, Nexus paid $ 5.5 million to settle a case with the California Insurance Commission, also agreeing to stop issuing immigration bonds in the state. The case claimed that Nexus was performing surety transactions without being properly licensed. Nexus paid the fine without admitting fault.

In December, Nexus settled a similar case in Virginia by paying a fine of $ 425,000 and agreeing to reduce its fees in the state. At the time, the Washington Post reported that the company was under investigation by at least nine federal and state government agencies, including the US Department of Justice.

New York Attorney General Letitia James on Monday described the Nexus anklets as “chains.”

“Libre by Nexus engaged in deceptive practices that targeted the most vulnerable population in our country, placing profits above the lives of human beings,” she said.

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