The Federal Trade Commission has sent a second round of refund checks to thousands of people who paid a company that promised to erase or shrink their student loan payments and then pocketed the money instead. The payments close out a case the agency has pursued since 2019, and they matter for borrowers and cosigners, including older adults who cosigned or helped pay for a loan, who lost money to a scheme built on debt-relief promises that were never kept.
A Second Check Reaches More Than 10,000 People
The FTC mailed 10,138 checks totaling more than $627,000 in the agency’s second distribution tied to the case against Mission Hills Federal, an operation that also did business as Federal Direct Group, National Secure Processing and The Student Loan Group. The agency’s refund page dates the second mailing to February 2026 and states the checks went to people who had already cashed their first refund check and paid the defendants more than $430.
That second payment builds on an earlier distribution described slightly differently across the FTC’s own pages. The agency’s refund notice says the first round, sent in March 2024, “resulted in more than $3.4 million in refunds,” while the FTC’s case file for the underlying lawsuit states the March 2024 mailing totaled more than $4.1 million, according to the agency’s Mission Hills Federal refunds page. Either figure puts the combined two rounds at several million dollars returned to people the agency says were harmed by the operation’s practices.
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A Scheme the FTC Says Bilked $23 Million From Thousands
The case behind the refunds names a cluster of related companies: Elegant Solutions Inc., doing business as Federal Direct Group; Trend Capital Ltd., doing business as Mission Hills Federal; Dark Island Industries Inc., also operating as Federal Direct Group and formerly known as Cosmopolitan Funding; Heritage Asset Management Inc., doing business as National Secure Processing; and Tribune Management Inc., doing business as The Student Loan Group. The FTC’s case file, filed in the U.S. District Court for the Central District of California, alleges the operation, along with individual defendants including Mazen Radwan and Rima Radwan, bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans.
The FTC accused the operation of charging illegal upfront fees for student loan debt relief and falsely promising to lower or eliminate customers’ loan payments. According to the agency’s case summary, the defendants did not use the money they collected to pay down any customer’s student loan balance and did not get a single balance forgiven despite the promises made during the sales pitch.
A Six-Year Path From Asset Freeze to Refund Check
The FTC filed its complaint on July 11, 2019, in the case docketed as Civil Action No. SACV 19-1333 JVS(KESx), and a federal court immediately froze the operation’s assets and installed a receiver while the case proceeded, according to the agency’s case file for the matter. The agency amended its complaint that September to add an additional individual defendant, Labiba Velazquez, before the case moved toward judgment. The court granted the FTC summary judgment on July 20, 2020, and the defendants appealed; the Ninth Circuit Court of Appeals rejected their arguments and affirmed the judgment on June 9, 2022.
Only after that appellate ruling became final did the agency begin distributing the frozen and recovered funds, starting with the March 2024 mailing and continuing with the February 2026 round of 10,138 checks. Nearly seven years passed between the original asset freeze and the second refund check landing in a victim’s mailbox, a timeline that reflects how long a contested federal case can take to work through summary judgment and an appeal before any recovered money reaches consumers.
As part of the judgment, the individuals and companies behind the scheme are permanently banned from working in telemarketing or debt-relief services, a restriction that applies regardless of how many additional distribution rounds the remaining settlement fund eventually supports.
What Recipients Are Told to Do With the Money
The agency’s notice tells recipients to cash their checks within 90 days, the standard window the FTC attaches to its refund mailings before a check becomes stale at the issuing bank. Anyone with a question about a check can call the refund administrator directly at 1-844-566-0108, a number separate from the FTC’s general consumer complaint line, since a dedicated administrator handles the mailing and any reissue requests tied to this specific case.
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This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
