CFPB Sues James Carnes and Melissa Carnes for Hiding Money to … – Consumer Financial Protection Bureau

Seeking to avoid more than $40 million in restitution and penalties, Carnes made a series of fraudulent transfers to his wife’s trust
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) took action against James R. Carnes and Melissa C. Carnes, both individually and as co-trustees of the James R. Carnes Revocable Trust and the Melissa C. Carnes Revocable Trust for hiding money through a series of fraudulent transfers in order to avoid paying more than $40 million in restitution and penalties for illegal payday lending activities. James Carnes attempted to evade a CFPB order requiring him and his company, Integrity Advance, to make harmed consumers whole and pay penalties to the CFPB’s victims relief fund. The CFPB is seeking injunctive relief, as well as asking the court to award a money judgment for the value of the fraudulently transferred funds.
James Carnes was the chief executive officer of Delaware-based Integrity Advance, a short-term, online lender. James Carnes and Melissa Carnes reside in Mission Hills, Kansas, which is also the principal place of administration of their revocable trusts.
In November 2015, the CFPB sued Integrity Advance and James Carnes for deceiving consumers about the cost of short-term loans and for using remotely created checks to debit consumers’ bank accounts even after the consumers revoked authorization for automatic withdrawals. Carnes sold his illegal payday lending business and had already received over $20 million in proceeds from that sale by the end of 2015. The CFPB’s lawsuit resulted in an agency order requiring Integrity Advance and James Carnes to pay restitution of over $38 million, Integrity Advance to pay a civil money penalty of $7.5 million, and Carnes to pay a civil money penalty of $5 million.
Integrity Advance and Carnes appealed the decision to the Tenth Circuit Court of Appeals , which affirmed the CFPB order in September 2022. The defendants did not comply with the CFPB’s order, nor did they obtain a stay of that order, while that unsuccessful appeal was pending. In July 2021, at the CFPB’s request, a federal judge entered a judgment and order requiring Carnes and Integrity Advance to comply with the CFPB order. To date, they have made no payments to satisfy the judgment.
In today’s action, the CFPB alleges that through their actions, James Carnes and Melissa Carnes transferred funds to hinder, delay, or defraud the CFPB, in violation of the Federal Debt Collection Procedures Act. The defendants committed multiple fraudulent transfers to allow James Carnes to hide the proceeds of the sale of his illegal payday lending business in order to avoid paying the CFPB owed restitution and penalties. Specifically, the complaint alleges that between 2013 and 2015, James Carnes fraudulently transferred $12.3 million to his wife, via their revocable trusts. James Carnes was co-trustee of the Melissa C. Carnes Trust and was able to use its funds for personal and business use.
Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB also has the authority to bring actions under the Federal Debt Collection Procedures Act for avoidance of obligations owed to the CFPB. The CFPB is requesting the court grant all necessary action to reclaim the fraudulently transferred money and assets. The CFPB is also requesting the court to enter a money judgement for the value of the fraudulent conveyances.
Read today’s complaint.
Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).


The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit
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