State announces charges in alleged student loan debt relief scam with more than 19,000 victims

A person speaks at a lectern.
California Atty. Gen. Rob Bonta in April 2021.
(Paul Kitagaki Jr. / Associated Press)

California Atty. Gen. Rob Bonta on Tuesday announced charges in an alleged multimillion-dollar student loan debt relief scam that prosecutors say stole from more than 19,000 victims in less than three years.

The alleged leader of the scam, Angela Mirabella, owned a network of debt relief businesses based in Orange County that operated call centers that promised to reduce or eliminate federal student loan debt, Bonta said. Prosecutors have accused Mirabella, as well as four call center managers and two sales agents, of stealing more than $6,130,000 from the victims, including 3,000 who lived in California.

An Orange County grand jury this month indicted Mirabella, as well as codefendants Cesar Sandoval-Vilchis, Stephen Gamboa, Briana Graham, Matthew Walsh, Teresa Lovato and Paulina Pacheco, on counts including grand theft by false pretenses, unauthorized use of personal identifying information, and unauthorized computer access and fraud. Mirabella faces special allegations for money laundering totaling more than $2.5 million and aggravated white-collar crime.

It was not immediately clear who is representing the defendants.


“Our students worked hard to achieve their college dreams, but for some their dreams have become horrific nightmares,” said Bonta at a news conference. “They were swindled; they were scammed.”

California officials and community college staff have uncovered what is believed to be one of the state’s largest college financial aid scam attempts.

According to prosecutors, between 2017 and 2020, Mirabella’s sales agents contacted about 380,000 student loan borrowers. The agents pretended to be associated with the U.S. Department of Education and told borrowers they could enroll them in programs that would lead to debt forgiveness, Bonta said.

If the borrowers hesitated, prosecutors alleged, the agents would pressure the victims by saying that their offers applied for a limited time and that there wasn’t another way to obtain student loan forgiveness.

The call centers also allegedly used personal identifying information that the borrowers disclosed to make changes to their Federal Student Aid accounts without their permission.

Each victim either paid or was scheduled to pay the call centers upfront fees and monthly fees of more than $1,000 for services, prosecutors said. Most mistakenly thought that the payments were going toward their student loan debt, causing many of them to stop making monthly payments on their student loans and resulting in late payment notifications and higher loan balances.

Bonta said student loan borrowers can reach out to to get free legal aid. He emphasized that the Department of Education does not charge fees to borrowers to qualify for loan forgiveness programs or change repayment plans.

“If you’re being charged with any of this, you may be a victim of a scam, and we want to hear from you,” he said.