The last defendant standing in a sprawling Orange County student loan fraud case has pleaded guilty, closing out a prosecution that once accused seven people of bilking thousands of borrowers nationwide out of millions of dollars. Paulina Francine Pacheco, who joined the Huntington Beach-based operation in 2017, was cleared of being one of the callers who tricked student loan holders, even as the case against her formally concluded.
Pacheco had been charged with identity theft, computer access and fraud, and grand theft, according to MyNewsLA.com. Before joining the firm, she had worked as a waitress for 10 years and reportedly drove a 2004 Volkswagen Jetta with 240,000 miles on it. Once inside the company, she studied the student loan forgiveness process as part of her training, and according to attorney Rob Harley, she obtained a borrower named Kristen Torres' personal information with Torres' consent — a detail that helped separate her case from the core fraud allegations.
Pacheco's plea marks the end of a case built around Angela Kathryn Mirabella, the owner of the Huntington Beach company at the center of what prosecutors described as an alleged $6 million nationwide student loan fraud scheme. Mirabella's operation, which included the Mirabella Group LLC along with Student Renew LLC and My Financial Solutions in Newport Beach, was investigated by California's Department of Justice, leading to a September 2021 grand jury indictment, as detailed by CBS Los Angeles.
From an 87-Count Indictment to Misdemeanors
Mirabella was initially charged with 87 counts, including special allegations for money laundering exceeding $2.5 million and aggravated white-collar crime enhancements, according to Courthouse News Service. But the case did not end anywhere near that scale. At trial, a jury deadlocked 10-2 for guilt on some counts and 11-1 for guilt on others, splitting on 62 counts that included conspiracy, computer access and fraud, identity theft, grand theft and money laundering, per MyNewsLA's reporting. Twenty-four felony counts were thrown out at trial altogether.
Mirabella was ultimately convicted on September 3, 2024, of one felony count of identity theft and was sentenced on June 20, 2025, to 360 days in jail along with five years of formal probation, the outlet reported. In July, Orange County Superior Court Judge Richard King reduced her remaining felony counts to misdemeanors, and Mirabella pleaded guilty to two misdemeanor counts of identity theft. She received a year of informal probation that runs concurrently with her formal probation, with her jail sentence suspended until November 6. Her informal probation is set to expire August 13, 2027, while her formal probation runs through June 19, 2030.
Co-Defendants' Charges Dismissed
Three other defendants — Cesar Sandoval-Vilchis, Stephen Allen Gamboa and Matthew Bruce Walsh — had agreed with prosecutors to testify at trial, and all three pleaded guilty before their charges were later dismissed, per the same report. Charges were also dismissed against Briana Nacole Graham and Teresa Marie Lovato. Fifty-eight remaining misdemeanor counts across the case were dismissed as well, leaving a legal outcome far narrower than the original indictment.
Attorney Bobby Samini, representing Mirabella, said she intended to help people navigate a complicated process, framing her business as aimed at legitimate assistance rather than deception. But prosecutor Tawnya Austin offered a starkly different characterization, saying the entire company was a scam and describing the case as a simple bait and switch, according to MyNewsLA.
How the Scheme Allegedly Worked
Prosecutors said Mirabella's company was associated with about 13,000 student loan accounts and contracted with financing firm Equitable Acceptance, which paid Mirabella's company in exchange for opening credit accounts in borrowers' names — accounts that were opened without those borrowers' consent, per MyNewsLA. The alleged scheme ran from 2017 through 2020 and reportedly involved about 19,000 borrowers nationwide, including roughly 3,000 in California. Loan holders were asked to provide email addresses and dates of birth to access federal files, information prosecutors say employees used to make loan holders believe they were speaking to the Department of Education itself.
Mirabella employees allegedly changed student aid terms without borrowers' consent, and Department of Education officials eventually blocked websites controlled by Mirabella after detecting links to numerous student loan defaults, according to the outlet's reporting. Most loan holders targeted by the operation did not actually qualify for loan forgiveness, even though the Mirabella company marketed itself as offering student loan forgiveness assistance.
One borrower, Kristen Torres, reportedly owed $9,000 before her loan increased to $12,000 after missed payments tied to the alleged scheme, per MyNewsLA. Separately, borrowers targeted by similar call centers nationwide suffered secondary financial damages — including unexpected interest accrual, late fees, and loan defaults — after staff altered account contact details without their knowledge, according to the California Attorney General's office.
A Financing Partner Already Banned by Federal Regulators
The role of Equitable Acceptance in this case echoes a pattern federal regulators flagged years earlier. In September 2019, the Federal Trade Commission sued Equitable Acceptance, alleging it violated the Telemarketing Sales Rule by providing substantial assistance to student loan debt relief operations and financing illegal advance fees through high-interest credit lines, according to the Federal Trade Commission. Under that rule, it is illegal for telemarketers and debt relief companies to request or receive advance fees before actually reducing or modifying a consumer's debt terms.
Equitable Acceptance entered a stipulated settlement with the FTC in 2021 that banned the company from assisting debt-relief services, barred it from collecting further payments from affected customers, and required consumer redress — a resolution that predated the outcome of the Orange County criminal case by years. In August 2022, the FTC issued more than $822,000 in refunds to over 14,000 student loan borrowers defrauded by third-party debt relief schemes that had relied on Equitable Acceptance to finance upfront fees, part of a broader federal crackdown that has included multi-agency efforts like the FTC's Operation Game of Loans targeting operations that falsely claim government affiliation.
Federal officials have repeatedly emphasized that all official loan assistance programs — including consolidation, income-driven repayment, deferment and forgiveness — are available directly from the U.S. Department of Education and Federal Student Aid at no cost through StudentAid.gov. Between 2017 and 2020, call centers connected to Mirabella's network reportedly contacted approximately 380,000 student loan borrowers across the country soliciting monthly fees of up to $1,000 each, according to CBS Los Angeles, a volume that dwarfs the roughly 19,000 borrowers identified as victims in the eventual case.
