The Federal Trade Commission has reached a settlement with Andris Pukke, founder of AmeriDebt Inc., and a related company owned by Pukke called DebtWorks Inc., which would require him to give up virtually all his assets to create fund for consumer redress, including homes in Miami Beach and Southern California.
The agreement prohibits Pukke from violating the Telemarketing Sales Rule and permanently bars him from engaging in credit counseling, debt management and other credit education activities.
The settlement imposed a $172 million suspended judgment that would be triggered if the defendants fail to comply with the agreement.
According to the FTC’s complaint, AmeriDebt represented itself as a nonprofit organization, while it allegedly funneled profits to other entities and individuals for profit. The FTC charged the firm didn’t provide credit counseling, but instead enrolled customers in a debt management plan. The company improperly kept its customers first payment intended for creditors as its own fee, according to the FTC.
The settlement still requires the approval of the U.S. District Court for the District of Maryland. It would end more than two years of litigation.
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