Federal judge orders Nexus Services to pay $811M in consumer fraud case

A federal judge has ordered Nexus Services, Libre by Nexus and three current and former company executives to pay more than $811 million in restitution and civil penalties stemming from the Augusta County-based company’s immigration bonding business.

In a 31-page ruling, U.S. District Judge Elizabeth K. Dillon granted the request of the Consumer Financial Protection Bureau and the attorneys general in Virginia, Massachusetts and New York for $230.9 million in restitution, $555.6 million in federal civil penalties, and an additional $24.4 million in civil penalties in the state suits.

The joint state-federal case was filed in 2021, with the state AGs and the CFPB alleging that Libre by Nexus was offering bonds to secure the release of immigrants held in detention centers while concealing or misrepresenting the true nature and costs of its services.

In the suit, the plaintiffs – the lawyers for the CFPB and the state AG offices – alleged that Libre by Nexus required consumers to sign confusing and misleading contracts that they present to consumers primarily in English, even though a vast majority of Libre’s clients do not speak or read English and do not understand it, and that Libre misled consumers into believing that their monthly fees are paying down their bond as a debt owed to Libre and that portions will be refunded at the conclusion of their immigration proceedings.

It was also alleged that Libre by Nexus created the false impression that it has associations with U.S. Immigration and Customs Enforcement and other government actors and that failing to pay the company’s fees can lead to arrest or deportation.

In her ruling, Dillon found that “(t)he allegations here demonstrate that defendants consciously disregarded substantial and unjustifiable risks to their vulnerable consumers – namely the risk of financial harm – in gross deviation from accepted standards set forth by the CFPA and other consumer protection laws.”

“(D)efendants deceived tens of thousands of vulnerable consumers about the nature of Libre’s services and the supposed penalties that would be imposed if consumers did not comply with defendants’ terms,” Dillon wrote. “Defendants claim that the ‘value of freedom’ for their consumers and the fact that their profits were ‘minimal’ should mitigate the amount of their civil penalties, but, again, the court has no evidence before it to assess these claims. The court struggles to identify any facts in the record that would mitigate the gravity of defendants’ violations.”