Panda Benefit Services Network: $16.7 Million Student Loan Scam Targeting America’s Most Indebted

The targets were the people least able to absorb the hit. Low-income borrowers, many already struggling under the weight of thousands of dollars in federal student debt, received phone calls from a corporate network operating across Nevada and California. The callers promised what desperate borrowers most needed to hear: loan forgiveness, lower monthly payments, a direct connection to the U.S. Department of Education. They took the money. They delivered nothing. When people asked for refunds, the companies refused.

A federal court in Los Angeles has now put a permanent end to three of the entities in that network. On May 6, 2025, United States District Judge Christina A. Snyder signed a Default Judgment and Order for Permanent Injunction against Public Processing Services LLC Quick Start Services LLC Signature Processing Services Inc. — three affiliates operating within the broader Panda Benefit Services enterprise. The judgment totals $16,787,028. The injunctions are permanent. The receiver has been ordered to liquidate everything.

The Non-Financial Ledger: What the Dollar Figure Cannot Measure

Sixteen million dollars is the number the court put on the harm. It is calculated from net revenue — money that flowed in from people who handed over their bank account numbers and routing numbers to a company that had no intention of helping them. But that figure captures only what can be extracted from financial records. It does not capture the hours spent on hold with actual loan servicers, trying to understand why the “new servicer” that took over your federal loans has no record of you. It does not capture the panic of realizing that while you were paying a scam operation, your actual federal loans may have been accruing interest or falling into delinquency. It does not capture what it costs a person, psychologically, to discover they were treated as a mark.

The court’s own findings describe the targets with precision: “many of whom were low-income borrowers saddled with thousands of dollars of student debt.” This was the selection criterion. These were people who could not afford a financial advisor to tell them the promises were too good to be true. These were people for whom the vision of loan forgiveness was not an abstraction — it was a lifeline. The Panda network recognized that vulnerability and built a business model around it. They used telemarketing — cold calls, interstate phone campaigns — to find people at their most financially desperate and sell them a lie packaged as government assistance.

The mechanics of the deception were systematic. Defendants told consumers they would secure forgiveness of their student loan debt. They told consumers they could obtain repayment plans that would lower monthly payment amounts. They told consumers they were loan servicers who would take over servicing their federal student loans. Most critically, they told consumers they “worked with” or were affiliated with the U.S. Department of Education. Some consumers handed over their FSA ID — the federal student aid login credential that provides access to the full federal loan portfolio. The court’s order specifically names FSA IDs among the categories of sensitive customer information that must be destroyed or protected. The implications of that detail are significant: the Panda network may have had login access to consumers’ federal student aid accounts.

When the promises evaporated and consumers understood they had been deceived, they did what any reasonable person would do: they asked for their money back. The court’s findings are direct on what happened next: “When consumers realized they were duped and asked for a refund, Defendants often refused to make them whole.” The word “often” is doing legal work in that sentence. It means this was a pattern. Refusing refunds to defrauded consumers was not a mistake or an oversight — it was an operational choice, a second layer of extraction applied to people who had already been taken. The initial fee was the first theft. The refusal was the second.

The structure of the enterprise compounds every individual harm. The court found that the defaulting defendants operated as a “common enterprise” within a larger network of interrelated companies sharing “common ownership, officers, business functions, employees, managers, and office locations” with commingled funds. This is the architecture of deliberate obscurity. When a consumer tried to figure out who had their money, they were dealing with a maze of LLCs and corporations spread across Nevada and California, each presenting a slightly different face, each moving money between shared accounts. The design makes accountability difficult, damages harder to trace, and recovery more expensive than most individual victims can afford to pursue. The $16.7 million judgment is not distributed back to individuals automatically — the court orders the FTC to use it for consumer redress, but the mechanism for finding each victim and returning each dollar is its own bureaucratic challenge.

Underneath all the legal language is a simple story that repeats itself across this country in various forms: a person carrying debt they cannot escape, who gets a phone call from someone claiming to have the answer, who gives up money they cannot spare, and who ends up worse off than before the call came. The dignity loss is specific. The trust loss is lasting. The Panda network did not just take money from these borrowers. They took the energy spent on hope. They took the months or years of relief a person feels when they believe their debt problem is being handled. They monetized the gap between what people need and what the federal student loan system actually delivers to ordinary borrowers without legal help. That is not a violation you can fully redress with a monetary judgment, however large.

Legal Receipts: What the Court Actually Said, Word for Word

The following passages are reproduced verbatim from the Default Judgment and Order, Case No. 8:24-cv-01386-CAS-RAOx, Document 103, filed May 6, 2025. These are not paraphrases. These are the court’s own findings.

“Defendants have deceived consumers, many of whom were low-income borrowers saddled with thousands of dollars of student debt, into paying hundreds of dollars for services that are made up, not as described, or simply never materialize.” Finding No. 18, Page 6

“Defendants told consumers that (1) Defendants would secure forgiveness of their student loan debt; (2) Defendants could obtain for consumers repayment plans that would lower their monthly payment amounts; (3) Defendants were loan servicers who would take over servicing their federal student loans; and (4) Defendants ‘worked with’ or were otherwise affiliated with the government, including specifically the U.S. Department of Education (‘ED’). But Defendants’ promises were false.” Finding No. 18, Page 6

“Defendants did not seek or deliver loan forgiveness or loan repayment plans. Defendants were not federal loan servicers and did not work with the Department of Education. Consumers have paid significant sums to Defendants only to find that Defendants were not affiliated with the government, and have not sought or obtained forgiveness of their loans, enrolled them in payment plans that reduced their monthly obligation, or taken over servicing their loans.” Finding No. 18, Pages 6–7

“When consumers realized they were duped and asked for a refund, Defendants often refused to make them whole.” Finding No. 18, Page 7

“In numerous instances, Defendants have, in connection with the telemarketing of student loan debt relief services, requested or received payment of a fee or consideration for debt relief services before: a) Defendants have renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the customer; and (b) the customer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the customer and the creditor.” Finding No. 21, Pages 8–9

“In numerous instances in connection with the advertising, marketing, promotion, offering for sale, or sale of student loan debt relief services, Defendants have made false, fictitious, or fraudulent statements or representations to customers of financial institutions to obtain or attempt to obtain customer information of a financial institution, such as credit or debit card numbers, bank account numbers, and routing numbers.” Finding No. 22, Page 9

“In numerous instances on or after April 1, 2024, in connection with the advertising, marketing, promotion, offering for sale, or sale of student loan debt relief services, Defendants have materially misrepresented, directly or by implication, that they were affiliated with the federal government, including specifically ED. These representations violate Section 461.2(b) of the Impersonation Rule, 16 C.F.R. § 461.2(b).” Finding No. 23, Page 10

“The FTC seeks a monetary judgment against the Defaulting Defendants in the amount of $16,787,028, representing the overall harm to consumers calculated from net revenue. This figure is entirely commensurate with the gravity of the Defaulting Defendants’ violations while also considering their roles in the scheme.” Finding No. 24, Pages 11–12

“The evidence demonstrates that the Defaulting Defendants have caused $16,787,028 in consumer harm from their violations of the TSR, Section 521 of the GLB Act, and the Impersonation Rule, in the three years prior to the FTC’s filing of the Complaint.” Finding No. 29, Page 13

“Consumers have suffered and will continue to suffer substantial injury as a result of the Defaulting Defendants’ violations of Section 5 of the FTC Act, the TSR, Section 521 of the GLB Act, and the Impersonation Rule. The Court finds that, absent a permanent injunction, the Defaulting Defendants are likely to continue to engage in the activities alleged in the Complaint.” Finding No. 26, Page 12

“The Defaulting Defendants, together with the other corporate Defendants, have operated as a common enterprise while engaging in the unlawful acts and practices described below. They have conducted the business practices described in the Complaint through an interrelated network of companies that have common ownership, officers, business functions, employees, managers, and office locations, and that commingled funds.” Finding No. 16, Page 6

“‘Defendants’ means Panda Benefit Services, LLC, Clarity Support Services, LLC, Pacific Quest Services, Prosperity Loan Services, LLC, Public Processing Services, LLC, Quick Start Services, LLC, Select Student Services, LLC, Signature Processing Services, Inc., Eduardo Avalos Martinez, Emiliano Salinas, Christopher Michael Hanson, and Melissa Salinas, individually, collectively, or in any combination.” Definitions Section D, Page 17

“Coinbase shall, within 10 business days of receipt of a copy of this Order, liquidate, and transfer the proceeds of such liquidation to the Receiver, all cryptocurrency held in the names of Public Processing Services, Quick Start Services, and Signature Processing Services.” Order Section VII.C.3, Pages 25–26

“The Receiver is directed to wind up the Receivership Entities and liquidate all assets within 365 days after entry of this Order.” Order Section VI, Page 24

The Numbers Behind the Judgment

The “Cost of a Life” Metric

Societal Impact Mapping: How This Scam Damages Everyone

Economic Inequality: Targeting the Debt-Trapped

Student loan debt in the United States is not randomly distributed. It falls heaviest on people who had the fewest financial resources to begin with: first-generation college students, people of color, graduates from lower-income households who had to borrow more because their families could not contribute. These are precisely the borrowers who are most likely to believe a professional-sounding caller claiming government affiliation. These are the people the Panda network went looking for.

The court’s finding that the targets were “many of whom were low-income borrowers saddled with thousands of dollars of student debt” is not a generic description. It is a description of the selection logic of the scheme. The Panda network did not cast a random net. Telemarketing campaigns of this kind use data about financial vulnerability to identify likely targets. The specific fraud — impersonating the Department of Education, promising income-driven repayment plan enrollment and loan forgiveness — was designed to resonate with people who know these programs exist, who have tried to access them through official channels, and who have found the process confusing, inaccessible, or fruitless. The scam parasitized the real inadequacy of federal loan relief infrastructure.

The upfront fee structure compounds the economic harm. Federal law — specifically the Telemarketing Sales Rule as cited in Count III of the complaint — prohibits debt relief companies from collecting fees before actually delivering results. The Panda network violated this rule systematically. They collected money from people who could not afford to lose it, before doing anything that would justify a fee. For a low-income borrower, even a few hundred dollars is not an abstraction. It is a month of groceries, a car repair, a utility bill. The court found this happened “in numerous instances.” The cumulative economic drain on some of the country’s most financially stressed households, spread across three years of operation, represents a specific and targeted upward wealth transfer from those who have little to corporate entities that were, in the end, too illegitimate to even show up to defend themselves in court.

The refusal to issue refunds upon demand is the final economic injury. A person who discovers they have been defrauded and successfully demands their money back can at least recover the financial loss. The Panda network’s policy of often refusing refunds sealed that exit. The court’s permanent injunction explicitly addresses this, prohibiting misrepresentation of refund policies — a measure that would only be necessary if such misrepresentation was documented. The economic harm is therefore not only the initial fee. It is the initial fee plus the cost of attempting to recover it, plus any downstream damage to the borrower’s actual loan status during the period they believed a fraudulent company was handling their servicer relationship.

Public Health: Financial Stress as a Health Crisis

The link between financial stress and physical and mental health outcomes is well-documented in public health literature. Chronic debt anxiety is associated with elevated cortisol levels, disrupted sleep, depression, and anxiety disorders. Student loan debt specifically has been studied as a chronic stressor that correlates with poorer health outcomes, delayed medical care, and reduced wellbeing. When you layer a consumer fraud onto existing student loan stress, you do not simply double a financial problem. You create a specific trauma: the discovery that someone used your trust and your desperation as raw material for profit.

The moment of realization described in the court’s findings — consumers who “found that Defendants were not affiliated with the government, and have not sought or obtained forgiveness of their loans” — is a specific psychological event. A borrower who spent weeks or months believing their debt problem was being handled, who may have mentally budgeted around a projected lower payment, who may have shared good news with family members, now has to process not only the continued existence of the debt but the betrayal of the person or company they trusted with their financial information. That FSA ID — the login credential to their federal student aid account — was handed to strangers. The feeling of violation associated with that discovery carries real psychological weight.

The court’s recognition that “consumers have suffered and will continue to suffer substantial injury” absent an injunction acknowledges that the harm does not end when the scam is discovered. Ongoing exposure to this kind of predatory telemarketing — which targets vulnerable populations by design — is itself a public health concern. The permanent ban on telemarketing imposed on the defaulting defendants is, in this light, partly a public health intervention: removing a source of targeted psychological and financial harm from communities that have already been subjected to it for at least three years.

Environmental Degradation: The Hidden Cost of Corporate Shell Structures

Environmental impact may appear tangential to a student loan fraud case, but the corporate architecture documented here carries real environmental implications. The Panda network operated through an interrelated system of LLCs and corporations with commingled funds, shared offices, and rotating business names. This structure — common to predatory industries across sectors — exists to obstruct accountability. The same architectural logic that makes consumer fraud harder to prosecute is the logic that insulates polluters, resource extractors, and environmental violators from accountability.

The court found that the three defaulting defendants held assets not only in bank accounts but in cryptocurrency on Coinbase, requiring the court to specifically order Coinbase to liquidate and transfer those holdings. Cryptocurrency operations carry meaningful energy footprints. The maintenance of cryptocurrency reserves as part of a fraud operation’s asset structure is a small but concrete example of how illicit financial flows contribute to energy consumption with no corresponding social benefit. More broadly, the corporate shell game documented in this case — Nevada LLCs, California LLCs, Las Vegas addresses, La Palma offices — represents a legal and regulatory infrastructure that is regularly exploited by industries with significant environmental footprints precisely because it works. The same features that made the Panda network difficult to shut down are features that environmental violators rely on.

Additionally, the paper, digital, and operational infrastructure of a large-scale telemarketing fraud operation — call centers, server infrastructure, payment processing systems, physical office space — carries its own resource footprint. When that infrastructure exists solely to deceive and extract money from vulnerable people, every watt consumed and every resource deployed represents pure social waste. The receiver has been ordered to wind down these entities within 365 days, returning whatever assets remain to consumers. The liquidation of these enterprises removes economic and environmental resources that were being deployed against the public interest.

What Now: The Defendants, The Watchlist, and Your Next Move

The Full Defendant Network (As Named in the Court Order)

The default judgment covers three entities. The broader Panda Benefit Services enterprise named in the court order, Case No. 8:24-cv-01386-CAS-RAOx, includes twelve defendants total. The following are named in the court’s own Definitions section:

Panda Benefit Services, LLC Clarity Support Services, LLC Pacific Quest Services Prosperity Loan Services, LLC Public Processing Services, LLC Quick Start Services, LLC Select Student Services, LLC Signature Processing Services, Inc.

Individual defendants named in the order:

Eduardo Avalos Martinez Emiliano Salinas Christopher Michael Hanson Melissa Salinas

The three defaulting defendants covered by this judgment failed to appear in court, failed to answer the complaint, and failed to challenge the Clerk’s entry of default. The court found their absence was not due to excusable neglect. Litigation against the remaining defendants continues.

The Regulatory Watchlist

Calls to Action

• If you or someone you know paid any company in the Panda network, file a complaint at reportfraud.ftc.gov and reference FTC Matter No. X240039 immediately.
• Check your FSA ID account at studentaid.gov for any unauthorized access, changes to contact information, or unfamiliar servicer entries. Change your password and enable two-factor authentication now.
• Verify your actual loan servicer directly through studentaid.gov. No legitimate third party needs your FSA ID. Any company asking for it is running a scam.
• Know your rights: legitimate student loan relief — income-driven repayment, Public Service Loan Forgiveness, IDR account adjustment — is free through the Department of Education. No fee, no middleman required.
• Contact your federal representatives and demand that the CFPB be fully funded and empowered to pursue these cases faster and with larger penalties. The three-year window of documented harm in this case means thousands of borrowers were victimized before the FTC filed suit.
• Connect with the Student Borrower Protection Center (SBPC) and local legal aid organizations that provide free student loan counseling. Build community networks that can flag these scams before they spread.
• Support mutual aid funds that help community members cover the financial gap while waiting for FTC consumer redress processes to complete. Institutional justice is slow. Neighbors can move faster.
• Share this investigation. The Panda network targeted people who did not know these scams existed. Information is the first line of defense.