The Consumer Financial Protection Bureau claimed victory Friday in resolving a long-standing lawsuit against the bankrupt Nevada debt-relief company Morgan Drexen, which preemptively sued the agency in 2013.

Morgan Drexen was ordered by the U.S. District Court for the Central District of California on Wednesday to pay roughly $133 million in restitution to customers and a $40 million fine. Walter Ledda, the company's owner, agreed to a settlement in October in which he was banned from providing debt-relief services and was ordered to pay $500,000 to redress consumer harm.

U.S. District Judge Josephine L. Staton wrote that "Morgan Drexen's unlawful conduct and willful attempts to mislead the court are well-documented."

The company managed to make some political hay for CFPB Director Richard Cordray. In 2013, Cordray was grilled by House Financial Services Committee Chairman Emeritus Spencer Bachus, R-Ala., about Morgan Drexen. The CFPB had sought to determine if Morgan Drexen was actually aiding borrowers in bankruptcy. Bachus called the CFPB's requests for bankruptcy records from the U.S. Trustee "data mining."

In 2013, the CFPB alleged that Morgan Drexen violated the Telemarketing Sales Rule and the Dodd-Frank Act by charging consumers upfront fees before it settled or amended a consumer's debt, particularly when a customer sought bankruptcy-related services. The bureau claimed that little or no bankruptcy work was actually performed for consumers. Instead, that bankruptcy-related contracts were presented to consumers as a ruse to disguise impermissible upfront fees for debt-relief work.

The CFPB estimated that more than 22,000 customers who had enrolled in Morgan Drexen's bankruptcy program since October 2010 were "charged millions of dollars in upfront fees."

In April 2015, Morgan Drexen was found to have falsified bankruptcy documents. In June, the court entered a permanent injunction against the company and banned it from collecting any more money from consumers. The firm filed for bankruptcy a day later and a trustee was appointed to maintain communication with borrowers.

In October, two of Morgan Drexen's attorneys, Vincent Howard and Lawrence Williamson, were found in contempt for hiring more than 50 employees and continuing to charge borrowers unlawful fees.

"The CFPB's victory sends a strong message that debt relief companies break the law when they defraud struggling consumers, and those actions have consequences for which we will hold them accountable," Cordray said in a press release.

Because Morgan Drexen declared bankruptcy, any judgments will now go through the bankruptcy process. The CFPB required Ledda to pay a $1 penalty because of his limited financial resources.

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