Consumer Financial Protection Bureau v. Pension Funding, et al

Case Summary:

On January 8, 2016, Krista Freitag was appointed as receiver of PENSION FUNDING, LLC and PENSION INCOME, LLC, their affiliates, subsidiaries and successors in interest (including but not limited to PGR, LLC), pursuant to an Order entered by the United States District Court for the Central District of California, Southern Division in an action filed by the Consumer Financial Protection Bureau (the “Bureau”) and the State of New York.

Case Updates:


Please note that on May 2, 2019, the Court approved and authorized, amongst other things, the Receiver to Make Final Distributions to Approved Claimants [who successfully negotiated the interim payment] and Establish a Reserve; Approving Final Accounting and Report; Approving Disposition of Books and Records; and Conditionally Discharging Receiver. A copy of said order and other information can be found below.


Based on the timeline approved by the court, the Receiver issued the final distribution payments.


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Frequently Asked Questions (Updated 06/12/2019):


When will investors receive their money back and how much will they get?


The Receiver completed her forensic accounting of funds received and disbursed by the receivership entities. The Court also approved the Receiver’s recommendation regarding the collection of amounts due from pensioners and the process for determining the proper amount of investor claims. The Court has ordered Pensioners to pay back the lump-sums received and ordered the Receiver to complete the investor claims process. The Receiver sent out correspondence to all Pensioners and Investors reflecting the Court’s order details, and sent all Investors their Claim Notices with specific instructions and a February 26, 2017 response deadline (see FAQ below).


A copy of the Court’s order can be found below – the “Order Approving in Part the Receiver’s Report and Recommendations”.


With the claims process completed, the Receiver filed a proposed distribution plan with the Court and requested permission to make interim distributions to Investors. The Court approved the Receiver’s proposed distribution plan and the Receiver issued the initial interim distributions by the end of the third quarter 2017. Please refer to the Exhibits (particularly Exhibit B) of the “Declaration of Krista L. Freitag, Court-Appointed Receiver, in Support of Motion for (A) Approval of Proposed Allowed Claim Amounts; (B) Approval of Distribution Plan; and (C) Authority to Make Interim Distributions” posted below.


A copy of the Court’s order approving the distribution plan can also be found below – the “(In Chambers) Order Granting Motion for (1) Approval of Proposed Allowed Claim Amounts, (2) Approval of Distribution Plan, and (3) Authority to Make Interim Distributions (Doc. 139).”


The Court has now approved and authorized, amongst other things, the Receiver to Make Final Distributions to Approved Claimants [who successfully negotiated the interim payment] and Establish a Reserve; Approving Final Accounting and Report; Approving Disposition of Books and Records; and Conditionally Discharging Receiver. A copy of said order and other information can be found below.


Based on the timeline approved by the court, the Receiver has issued the final distribution payments.


Are pensioners required to make payments they owe to the receivership entities?


Yes. As mentioned above, the Court ordered Pensioners to pay back lump sums they received.


What is the deadline for Investors to respond to the Claims Notices?


In late December 2016, all Investors were sent a copy of his/her Claims Notice via USPS certified/return receipt by the Receiver. The February 26, 2017 deadline has passed and the Court has ordered any/all claims submitted on or after March 1, 2017 to be disallowed.



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Court Filings: