Kevin McCoy

USA TODAY

Federal investigators have halted an alleged student loan debt relief scam that bilked more than $11 million from consumers nationwide.

Strategic Student Solutions and several related companies falsely promised to reduce or eliminate student loan debt and also offered the borrowers non-existent credit repair services, in exchange for upfront fees and monthly payments, the Federal Trade Commission charged in court papers made public Thursday.

Although borrowers allegedly got no relief from their debts, Dave Green, owner of the companies, used corporate funds to pay for jewelry, casino tabs, mortgage payments, luxury vehicles and construction of a pool, the FTC charged.

FTC Complaint v Strategic Student Solutions

A federal court in Florida approved a temporary restraining order that halted the operation, pending a hearing on a permanent injunction.

"Consumers who paid Strategic Student Solutions for help with their student loans watched their situations go from bad to worse," Tom Pahl, acting director of the FTC's consumer protection bureau, said in a written statement. "The bottom line: never pay an up-front fee to a company promising to provide debt relief."

Jeffrey Backman and Richard Epstein, attorneys representing the companies and Green, did not immediately respond to a phone message seeking comment.

Since at least 2014, the companies preyed on student loan borrowers by falsely promising to reduce their repayments or eliminate part of the debt by enrolling them in income-driving repayment plans or loan forgiveness programs, the FTC court complaint charged.

In exchange, the borrowers allegedly were charged illegal upfront fees as high as $1,200 plus monthly payments that typically totaled $49.99.

One of the company websites, which was inaccessible Thursday, allegedly advertised "1 Payment Student Loan Debt Relief Option" and also promised "Payments as low as $0 Monthly," the complaint charged.

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Only afterward did the consumers learn that the promises were empty. They also learned that none of the payments they made to the companies had been applied toward paying off their student loans.

"In some instances, consumers have ended up owing more on their student loans than when they first signed up" for the companies' purported relief programs, the complaint alleged.

Borrowers who tried to cancel their enrollments with the companies in some cases allegedly were warned that "they could suffer adverse consequences for future eligibility for federal loan forgiveness programs." That statement, too, was false, federal investigators charged.

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FTC spokeswoman Nicole Jones said investigators did not yet have an estimate of the number of consumers defrauded by the alleged scam. However, an online posting by a Better Business Bureau office in Florida indicated it had received 194 complaints against the Strategic Student Solutions.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc