A former AmeriDebt Inc. official has agreed to pay Maryland $235,000 to settle allegations that he was responsible for unfair and deceptive practices in his role as chief operations officer of the credit-counseling company's for-profit affiliate, DebtWorks.

Maryland Attorney General J. Joseph Curran Jr. alleged that Michael Kiefer helped misrepresent AmeriDebt's debt-management plans by saying they would help consumers' credit, when in fact they could hurt a consumer's ability to obtain loans.

AmeriDebt of Germantown was once one of the nation's largest and most aggressively marketed debt-management firms, advertised heavily on cable TV and the Internet. It is no longer in business after its practices came under fire from federal and state regulators. The Federal Trade Commission and several states accused it of deceiving consumers by charging high fees and falsely operating as a nonprofit organization while allegedly being run to make money for its founders. DebtWorks is also defunct.

Consumer complaints about AmeriDebt prompted the Internal Revenue Service to investigate more than 60 nonprofit credit-counseling firms for possible misuse of their tax-exempt status for the benefit of their owners. So far, the agency has revoked the tax status of at least four firms and is challenging many others.

Kiefer's attorney, Stanley Reed, said Kiefer adamantly denies any wrongdoing but agreed to settle to avoid years of expensive litigation. Kiefer agreed to pay the attorney general's office $220,000, which will be used to pay consumers harmed by DebtWorks' practices, and $15,000 in expenses.

Maryland officials said the settlement does not preclude action against Andris Pukke, the founder of AmeriDebt and DebtWorks. Pukke has been sued by the FTC and the IRS, which is seeking more than $300 million in taxes and penalties. Pukke has denied allegations of wrongdoing.

Maryland Attorney General J. Joseph Curran Jr. said consumers were deceived on debt management.