Chattanooga payday lender Carey Brown faces criminal charges

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Carey Brown
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Payday lender Carey Brown, along with associates Joanna Temple and Ron Beaver, will face criminal usury charges in New York City nearly three years after an investigation by the Chattanooga Times Free Press found the trio had created a syndicate of shell companies designed to market, make and collect payday loans considered illegal in many states.

The New York Times reported that Brown, Temple and Beaver “have carefully designed their business units to hide ownership and ensure growing profits.”

Brown, a former used car salesman in Rossville, Ga. Who built an empire worth hundreds of millions of dollars, is accused, along with a dozen companies and his associates, of flouting the New York rules which limit the interest rates on such loans, while attempting to mask the fact that these loans originated in Chattanooga.

The former payday lender, with the help of legal counsel Temple and COO Beaver, has used a number of tricks to hide the true identity of its businesses, ranging from setting up shell companies in Bermuda and on Indian reservations in prosecution of former employees who spoke to reporters, an investigation has determined.

“The operating practices – including sky-high interest rates and automatic payments to borrowers’ bank accounts, as set out in the indictment – are sadly typical of this industry as a whole,” Cyrus said. R. Vance Jr., the Manhattan district attorney, according to the New York Times.

Brown incorporated the online payday lending arm, MyCashNow.com, in the West Indies, a tactic that prosecutors said was aimed at putting the business out of the reach of U.S. officials.

The indictment against Brown, Beaver and Temple said the trio had orchestrated a “systemic and pervasive attrition plan.”

But Brown’s attorney, Paul Shechtman with Zuckerman Spaeder, told the New York Times that Brown “had acted in good faith and was eager to show his innocence.”

On Monday, Beaver, who was arraigned in state court, pleaded not guilty. Denis Patrick Kelleher of the Clayman & Rosenberg law firm said his client “voluntarily appeared in court this morning to defend himself against these charges.”

The Times said such accusations are rare.

“This case is a harbinger of others who could be brought to hold back payday lenders who are offering fast cash, backed by borrowers’ paychecks, to people who are desperate for money,” he said. writes New York Times reporter Jessica Silver-Greenberg in a web update.

Journalists who attempted to make the connection between Brown’s business interests have themselves been threatened with legal action, and Temple has repeatedly asserted that his firm, the Scenic City Legal Group, was not directly linked to it. The empire over Brown’s paycheck, despite the fact that the company founder has identified himself on several occasions as a representative of one of Brown’s companies.

Brown has pledged to donate $ 1 billion in profits from his payday empire to charity, forming the Covenant Values ​​Foundation to support Christian causes around the world. He has gained partners in this effort such as Hugh O. Maclellan, who descends from the family that founded what is now disability insurer Unum Group.

Brown also diversified his empire, taking over language translation software for missionaries that later became what is now a company called Sovee, and investing in real estate throughout the Chattanooga area.

Payday loans are not the only area in which Brown has come under fire. He gained notoriety thanks to a million dollar donation from another of his associates, Sherry Huff, whom a nonprofit group said Brown himself had directed towards an anti-Obama campaign attacking the president for his support for same-sex marriage.

Through it all, Brown maintained that his actions were legal and subject to federal, not state, jurisdiction. He dodged cease and desist orders from attorneys general in several states, while dismissing an investigation by federal agencies as a routine matter.

Eventually, he was forced to lay off hundreds of employees in 2013 after New York bankers refused to let him continue to use their network to deposit his loans into customer accounts and withdraw fees.

Many of these employees, who previously worked at Brown companies with names like Area 203, Cloudswell, and ACH Federal, stayed in the Chattanooga area in marketing, information technology, and payday loan companies. .

Read more in the Times Free Press tomorrow.

Contact Dave Flessner at [email protected] or 757-6340.

Contact editor Ellis Smith at 423-757-6315 or [email protected] with advice and materials.

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