The Consumer Financial Protection Bureau (CFPB) has taken action against Edgar Radjabli, operator of Loan Doctor, who allegedly took customer funds and placed them in risky ventures like Celsius Network – a crypto yield platform that is now bankrupt. The complaint filed by the CFPB alleges deceptive acts and practices. Both the CFPB and the defendants have agreed to the Stipulated Final Judgement and Order, and it is now awaiting court approval. The settlement requires the defendants to refund all deposits plus interest, totaling about $19 million, something the defendants state has already been completed.
Radjabli apparently told customers the money would be placed in guaranteed return savings products within a commercial bank. He also allegedly told customs that deposited funds would be used to make loans to healthcare professionals and would yield interest rates between 5% and 6.25%.
The CFPB claims that from August 2019, Loan Doctor took millions of dollars from at least 400 individuals who deposited money into Loan Doctor’s savings product. The CFPB alleges that Radjabli actually placed funds in a hedge fund he controlled and in crypto, including Celsius Network. Deposited funds were also said to have been invested in actively traded securities or loaned, through a third party, to investors using individual stock portfolios as collateral.
CFPB Director Rohit Chopra, stated:
“Loan Doctor and its founder masqueraded as a traditional bank to open accounts for people seeking a high-yield savings product. In reality, this outfit and its ringleader were using customer funds for risky investments.”
The settlement includes a civil penalty of $391,530, and Radjabli would be permanently banned from engaging or assisting others in any deposit-taking activities.
Radjabli has been separately charged by the Securities and Exchange Commission (SEC).
Update: The text has been edited to reflect the settlement has been accepted by the defendant. As well, CI received an email from an affiliated individual who stated that in March of 202o, Loan Doctor told the CFPB it had terminated its relationship with Celsius due to its concerns about the operations. At that time, the CFPB took no further action in regard to Celsius which filed for bankruptcy in 2022. Loan Doctor is now defunct, having closed several years ago.
