AmeriDebt Inc. founder Andris Pukke yesterday settled a $172 million lawsuit with the Federal Trade Commission by agreeing to turn over almost all of his assets — up to $35 million — to hundreds of thousands of consumers allegedly bilked by the credit counseling agency.

It may be months before 400,000 consumers find out how much money they will receive, or if they receive any at all. Two courts must approve the settlement, and Pukke's creditors — including the Internal Revenue Service — may object.

"You would always want to get consumers all their money back, but it's often not the case," said Lucy Morris, the FTC's lead trial attorney. "I hope consumers will be happy. We stopped somebody that we believe engaged in wrongdoing."

The settlement came the day before a U.S. District Court in Greenbelt, Md., was scheduled to hear the FTC civil case and a private lawsuit against Pukke. Pukke did not admit to any wrongdoing by agreeing to the settlement.

For regulators and consumer advocates, Pukke and AmeriDebt became the face of all that was wrong with a new breed of credit counselors that emerged in the 1990s as Americans' appetite for easy credit grew. AmeriDebt was accused of charging high, hidden fees for its counseling services, and then funneling millions to Pukke's for-profit processing company, DebtWorks. That company, lawsuits said, financed Pukke's lavish lifestyle that included million-dollar homes and vacations to exotic locales.

The FTC sued Pukke, AmeriDebt and DebtWorks in November 2003, throwing significant resources behind the lawsuit.

The settlement bans Pukke for life from credit counseling, debt management and credit education activities. The deal also settles the 2003 private lawsuit that was seeking even more restitution from Pukke and DebtWorks.

David J. Vendler, a lawyer representing the class of consumers, said it would be impossible to recover all the fees that consumers paid. AmeriDebt spent a fortune on advertising and labor and Pukke "went through money like water," Vendler said.

Throughout more than two years of legal wrangling, AmeriDebt maintained that it helped desperate consumers drowning in debt by negotiating more favorable terms with their creditors.

Pukke was not facing criminal charges, although he is under investigation by postal inspectors in New York.

Pukke founded AmeriDebt in late 1996, not long after pleading guilty in Pennsylvania for mail fraud involving a loan scheme. AmeriDebt, through heavy television advertising, grew into one of the largest credit counseling agencies in the country. Pukke created DebtWorks in 1999 to process AmeriDebt's accounts.

With rising consumer complaints, four states joined the FTC in suing AmeriDebt in 2003, and the nonprofit filed for bankruptcy the next year. Early last year, the nonprofit agreed to transfer its remaining clients to another agency and close its doors.

Under the settlement, the asset freeze continues and the receiver will keep gathering Pukke's property. His holdings will be sold, including his homes in Miami Beach, Fla., and Newport Beach, Calif. Pukke will be allowed to keep $125,000 for living expenses. Excess funds recovered will go to Pukke's creditors in his bankruptcy case.

About 400,000 consumers from both the FTC and class-action lawsuits are expected to be eligible for the restitution. Officials will contact eligible consumers. However, the FTC has set up a consumer hot line, (877) 862-0886, for updates.