Nexus Services CEO calls state AGs’ lawsuit ‘a form of retaliation’

Company responds with hotline to report 'abusive government agents and policies' in Va., Mass. and N.Y.

Published March 12, 2021 by Kate Andrews

Nexus Services Inc., the bonding company being sued by the states of Virginia, Massachusetts and New York, responded Friday with accusations of its own. In a statement, Nexus CEO and President Mike Donovan said that the state attorney generals’ allegations that the company financially preyed on immigrants held in federal detention are “offensive, 100% false and detrimental.”

Donovan said in the statement that he believes that the three attorneys general and the federal Consumer Financial Protection Bureau, which filed the civil suit in the U.S. District Court for the Western District of Virginia last month, sued the company “as a form of retaliation” after Nexus subsidiary Libre by Nexus filed suits against Virginia, New York and Massachusetts “to ensure the rights of prisoners.” Libre by Nexus also successfully sued CFPB in 2017 to suspend its investigation of Nexus.

Nexus, founded in Augusta County in 2013, is now legally based in Atlanta but its founders are residents of Fishersville and its principal place of business is in Verona, according to the complaint.

Donovan said in a statement released in February that “while the federal government continues to detain scores of immigrants, the AGs have ignored the fact that these detention centers operate within their own borders. From Buffalo, [New York], to Farmville to Suffolk, [Massachusetts], immigrants are tortured while Herring, [New York Attorney General Letitia] James and others conduct a shadowy investigation into the only company helping the immigrants they claim to be protecting.”

The company seeks to have the federal suit dismissed, according to documents filed with the court.

Libre by Nexus also announced Friday it has set up toll-free hotlines in the three states so callers can report “abusive government agents and policies” and have their claims reviewed by legal counsel.

On Feb. 22, Virginia Attorney General Mark Herring joined the attorneys general of New York and Massachusetts and the CFPB in suing Nexus and its Libre subsidiary, along with its co-owners, Chief Financial Officer and Executive Vice President Richard Moore, Nexus Services Director Evan Ajin and Donovan. The suit alleges they violated the federal Consumer Financial Protection Act of 2010 and “engaged in deceptive and abusive acts or practices in connection with Libre’s offer of credit to consumers for their immigration bonds,” and that Nexus and the three individual defendants “knowingly or recklessly provided substantial assistance to Libre in its deceptive and abusive acts or practices.”

Libre by Nexus offers to pay for customers’ immigration bonds to secure their release from government detention centers while they are being held by the U.S. Immigration and Customs Enforcement system. The attorney generals’ lawsuit allegations include that Nexus charged “large upfront fees and hefty monthly payments while concealing or misrepresenting the true costs of its services,” including $420 monthly payments for GPS ankle monitors that didn’t work since February 2018. According to the company, the GPS monitors were phased out in 2020, and instead customers are tracked with the use of an app downloaded to their smartphones.

Also, according to the suit, “from at least 2014 until at least late 2017, Libre used a multipart, written client agreement of over 20 pages, all written in English except for a single page written in Spanish,” although “the vast majority of Libre’s clients and their co-signers are Spanish speakers, most of whom do not read or write English and many of whom cannot read or write in any language.”

The states and CFPB filed 17 counts against the company in the February suit and asked the court to award Virginia up to $2,500 per violation, as well as $1,000 per violation in legal fees, along with other damages and restitution.

Libre, in a response to the suit filed earlier in March, argues that in earlier suits filed by Libre customers, “every time a Libre program participant has testified under oath regarding allegations of consumer fraud, three different, well-respected arbitrators (one a former judge) concluded that zero fraud took place.”

In December, the Virginia State Corporation Commission ordered that Libre by Nexus pay $425,000 to settle the state’s Bureau of Insurance’s investigation into the company, which was accused of acting as an unlicensed insurance agent. Libre is under investigation by at least nine other state or federal agencies, including the U.S. Justice Department.

“Libre by Nexus is hopeful that this baseless lawsuit will bring the real issues of detaining immigrants into the light and pledges to keep helping those who are being unfairly and egregiously detained, tortured and separated from their families,” the statement said. A hearing date has not yet been set.