Appeals court upholds summary judgment against student loan debt relief scammer

Order requiring company owner to pay over $95 million in restitution and $148 million in civil penalties upheld

Company was found to have illegally charged up-front fees up to $1,899 for filling out and submitting forms to the federal government for loan repayment and consolidation programs, which eligible borrowers can apply for on their own for free

August 8, 2025 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced that yesterday, the Ninth Circuit Court of Appeals upheld a summary judgment which was granted in his office’s October 21, 2019 lawsuit accusing Consumer Advocacy Center and its owner, Kaine Wen of running a fraudulent scheme that falsely promised borrowers student-loan forgiveness. Attorney General Ellison filed the lawsuit alongside the Consumer Financial Protection Bureau (CFPB) and the states of North Carolina and California.

“Preying on people who are already struggling to afford their lives is as low as it gets,” said Attorney General Ellison. “The judgment we won against these scammers is substantial, and I hope it serves to deter other con artists from taking advantage of the financial pressure that many student loan borrowers face. I am proud to lead an office that fights every single day to hold bad actors accountable when they defraud Minnesotans, and I am proud to have won over $1 million in relief for folks in our state who were cheated. If any Minnesotan believes they have been the victim of a scam, I strongly encourage them to file a complaint with my office.”

The district court granted Minnesota’s motion for summary judgment on July 7, 2023, ruling that the companies violated the law when they illegally charged consumers up to $1,899 to enroll them in repayment plans or consolidation loans that all eligible federal student-loan borrowers could apply for on their own for free through the United States Department of Education. The companies and their owners, including Kaine Wen, were found to have collected over $95 million in illegal fees.

Additionally, the companies deceived consumers into believing that these fees would go toward paying down the consumers’ student loan debt, when the companies actually pocketed the fees. The companies were also found to have falsified borrowers’ family size, marital status, and income to borrowers’ student loan servicers in order to qualify borrowers for artificially low monthly payments.

As part of the judgment upheld yesterday, Kaine Wen was ordered to pay a monetary judgment of over $95 million in restitution jointly with his co-defendants and $148 million in civil penalties.  Additionally, the judgment permanently bans Wen from offering or marketing consumer financial products or services.   Prior to the judgment, in November 2022, the CFPB used its Civil Penalty Fund to repay consumers scammed by Wen and his companies. Over $1 million went to 912 Minnesota consumers who were victims of the scheme.

Minnesotans who believe they were the victim of a scam are encouraged to file a complaint with the Office of Attorney General Keith Ellison online. The Office can also be contacted by phone at (651) 296-3353 for Twin Cities residents and (800) 657-3787 for people in Greater Minnesota.