A Richmond businessman who sublet apartments to desperate people with bad credit has agreed to a settlement with the Attorney General’s Office to end a complaint that he defrauded his clients.

Dr. Carl S. Vaughn agreed to pay $10,000 to reimburse renters who were charged fees for educational services that the complaint alleged he never provided, according to the settlement the Richmond Circuit Court approved last month.

A former principal of Armstrong High School 15 years ago, Dr. Vaughan also agreed to dismiss all lawsuits, vacate any judgments and cease collection efforts against any tenant who sublet from him between Jan. 1, 2016, and Jan. 13, 2022. During that time, he provided relief to an estimated 175 families, and predominantly worked with Black women with children needed a place to live.

He also agreed to pay $20,000 to the Attorney General’s Office to cover legal expenses and a fine, but the settlement states that payment would remain suspended as long as he does not violate the state’s Consumer Protection Act.

In agreeing to the settlement, one of the first of its kind involving this kind of business, Dr. Vaughan “did not admit to any violation, or liability arising from, any state or federal law, rule or regulation.”

David B. Irvin and James E. Scott, two assistant attorneys general, spearheaded the case that resulted from numerous complaints about Dr. Vaughan’s operation to the Attorney General’s Consumer Protection Section.

The case was filed in August 2021 while Democrat Mark R. Herring was attorney general and concluded a year later under Republican Jason S. Miyares, who is now the state’s top lawyer.

According to the settlement, Dr. Vaughan operated several companies, JumpStart U2 Inc., Jump Start University Inc. and Vasilios Education Center Inc., doing business as Vasilios Supportive Housing Initiative.

The settlement alleged Dr. Vaughan and his companies “misrepresented that they provided service programs to tenant consumers.”

According to the document, renters were falsely told that they were being offered something more than a traditional lease, with Dr. Vaughan providing sham, meaningless documents indicating the clients were entering a “housing initiative.”

The tenants also were never told they were subleasing apartments that Dr. Vaughan and his companies had leased from the actual owner, nor advised them who the real landlord was, the document noted.

He also installed tenants in “as is” apartments that did not meet minimal housing standards under the state Landlord Tenant Act and did not make essential repairs, the document stated.

According to the settlement, Dr. Vaughan can continue to sublease, but only if he fully informs those who agree to rent from him how his business operates.

He declined to comment on whether he is continuing his business.