“Payday Loan Godfather” Sentenced to 14 Years in US Prison


(Reuters) – Pennsylvania businessman known as the “godfather of payday loans” was sentenced to 14 years in prison on Friday for plotting to collect hundreds of millions of dollars in illegal high-interest loans granted to thousands of people.

Charles Hallinan, 77, was sentenced by U.S. District Judge Eduardo Robreno in Philadelphia after a federal jury found him guilty in November of charges including racketeering conspiracy, mail fraud and wire fraud, the officials said. prosecutors.

Prosecutors had asked for up to 19.5 years in prison for Hallinan, who they said owned and operated more than a dozen payday lending businesses and, through his crimes, harmed hundreds of thousands of financially desperate people.

Robreno also ordered Hallinan to pay a fine of $ 2.5 million.

Michael Rosensaft, Hallinan’s lawyer, said he plans to appeal. Rosensaft also expressed concern over how Hallinan, who suffers from cancer and heart disease, would be treated in prison.

The charges against Hallinan were filed in 2016 amid a crackdown by prosecutors during President Barack Obama’s administration on the abusive practices of payday lenders.

These companies offer small loans that need to be repaid within a short period of time, often from the person’s next paycheck, but critics say borrowers have to pay excessively high interest rates and fees.

Prosecutors said Hallinan from 1997 to 2013 operated and funded numerous payday loan companies with names like Easy Cash and Apex 1 Processing that issued and collected debts on loans with annual interest rates that could exceed 780%.

More than a dozen states effectively ban payday loans, while many more place limits on payday loans.

To evade state laws like these, Hallinan has sought to hide his involvement in his businesses by paying two Native American tribes and one First Nations tribe in Canada to be “straw” lenders in order to claim immunity. sovereign, prosecutors said.

From 2007 to 2013, Hallinan sought to collect more than $ 690 million in illegal debt and was successful in raising $ 492 million, prosecutors said.

They said Hallinan had also taught others about his “rent-a-tribe” payday loan model, including a “criminal protégé,” Scott Tucker, a racing driver accused of running an illegal loan business on the bank. online salary of $ 3.5 billion.

Tucker was sentenced in January to more than 16 years in prison after a federal jury in Manhattan found him guilty of charges, including conspiracy to commit racketeering.

Wheeler Neff, a Delaware lawyer accused of aiding Hallinan, was convicted alongside Hallinan was sentenced in May to eight years in prison.

Reporting by Nate Raymond in Boston; Additional reporting by Jonathan Stempel in New York; Editing by Alistair Bell

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