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Related: About this forumOwner Of Payday Lending Enterprise Found Guilty of Orchestrating $220 M Fraudulent Lending Scheme
https://www.justice.gov/usao-sdny/pr/owner-payday-lending-enterprise-found-guilty-jury-orchestrating-220-million-fraudulentDepartment of Justice
U.S. Attorneys Office
Southern District of New York
FOR IMMEDIATE RELEASE
Wednesday, November 15, 2017
Owner Of Payday Lending Enterprise Found Guilty By Jury Of Orchestrating $220 Million Fraudulent Lending Scheme
Defendant Extended Predatory Loans to More Than 620,000 Financially Struggling Americans, Including Victims Who Never Sought Them
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that RICHARD MOSELEY SR. was found guilty today in Manhattan federal court of wire fraud, aggravated identity theft, and violating the Racketeer Influenced Corrupt Organizations Act (RICO) and the Truth in Lending Act (TILA) for operating a payday lending enterprise that systematically evaded state usury laws in order to charge illegally high interest rates, and for issuing payday loans to consumers who never even sought them. MOSELEY was convicted following a two-and-a-half week trial before U.S. District Judge Edgardo Ramos.
(snip)
Between 2004 and September 2014, MOSELEY owned and operated a group of payday lending businesses (the Hydra Lenders) that issued and serviced small, short-term, unsecured loans, known as payday loans, through the Internet to customers across the United States.
For nearly a decade, MOSELEY systematically exploited more than 620,000 financially struggling working people throughout the United States, many of whom were having trouble paying for basic living expenses. MOSELEY, through the Hydra Lenders, targeted and extended loans to these individuals at illegally high interest rates of more than 700 percent, using deceptive and misleading communications and contracts and in violation of the usury laws of numerous states that were designed to protect residents from such abusive conduct.
In furtherance of the scheme, the Hydra Lenders loan agreements materially understated the amount the payday loan would cost and the total of payments that would be taken from borrowers bank accounts. The loan agreements suggested, for example, that the borrower would pay $30 in interest for $100 borrowed. In truth and in fact, however, MOSELEY structured the repayment schedule of the loans such that, on the borrowers payday, the Hydra Lenders automatically withdrew the entire interest payment due on the loan, but left the principal balance untouched. As a result, on the borrowers next payday, the Hydra Lenders could again automatically withdraw an amount equaling the entire interest payment due (and already paid) on the loan. Under MOSELEYs control and oversight, the Hydra Lenders proceeded automatically to withdraw such finance charges payday after payday, applying none of the money toward repayment of principal. Indeed, under the terms of the loan agreement, the Hydra Lenders withdrew finance charges from their customers accounts unless and until consumers took affirmative action to stop the automatic renewal of the loan.
Through the Hydra Lenders, MOSELEY also extended numerous payday loans to victims across the country who did not even want the loans or authorize the issuance of the loans, but instead had merely submitted their personal and bank account information in order to inquire about the possibility of obtaining a payday loan. MOSELEY then automatically withdrew the Hydra Lenders usurious financing fees directly from the financially struggling victims bank accounts on a bi-weekly basis. Although hundreds of victims, over a period of years, lodged complaints that they had never approved or even been aware of the issuance of the loans, the Hydra Lenders, at MOSELEYs direction, continued to issue loans to consumers without confirming that the consumers in fact wanted the loans that they received or had reviewed and approved the loan terms.
Throughout their existence, the Hydra Lenders were the subject of complaints from customers across the country, numerous state regulators, and consumer protection groups, about the Hydra Lenders deceptive and misleading practices in issuing usurious and fraudulent loans. Beginning in approximately 2006, in an attempt to avoid civil and criminal liability for his conduct, and to enable the Hydra Lenders to extend usurious loans contrary to state laws, MOSELEY created the sham appearance that the Hydra Lenders were located overseas. MOSELEY nominally incorporated the Hydra Lenders first in Nevis, and later in New Zealand, and claimed that the Hydra Lenders could not be sued or subject to state enforcement actions because they were beyond the jurisdiction of every state in the United States. In truth and in fact, the entirety of MOSELEYs lending business, including all bank accounts from which loans were originated, all communications with consumers, and all employees, were located at MOSELEYs corporate office in Kansas City, Missouri. The Hydra Lenders purported offshore operation consisted of little more than a service that forwarded mail from addresses in Nevis or New Zealand to the Kansas City, Missouri, office.
In furtherance of the scheme, MOSELEY falsely told his attorneys that the Hydra Lenders maintained physical offices and employees in Nevis and New Zealand and that the decision whether to extend loans to particular consumers was made by employees of the Hydra Lenders in Nevis and New Zealand. As MOSELEY knew, at no time did the Hydra Lenders have any employees involved in the lending business in Nevis or New Zealand, and at all times the decision whether to underwrite loans was made by employees under MOSELEYs direction in Kansas City, Missouri. To defeat state complaints and inquiries, MOSELEY directed his attorneys at outside law firms to submit correspondence to state Attorneys General that stated falsely, unbeknownst to MOSELEYs attorneys that the Hydra Lenders originated loans exclusively from their offices overseas and had no physical presence anywhere in the United States. In reliance on this materially false and misleading correspondence, many state Attorneys General and regulators closed their investigations on the apparent basis that they lacked jurisdiction over the Hydra Lenders and that the Hydra Lenders had no presence or operations in the United States.
From approximately November 2006 through approximately August 2014, the Hydra Lenders generated more than $200 million in revenues. MOSELEY himself made millions of dollars from the scheme, which he spent on, among other things, a vacation home in Mexico, luxury automobiles, and country club membership dues.
(snip)
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Owner Of Payday Lending Enterprise Found Guilty of Orchestrating $220 M Fraudulent Lending Scheme (Original Post)
nitpicker
Nov 2017
OP
TubbersUK
(1,439 posts)1. I hope he gets a hefty sentence,
having seen the damage these scumbags inflict on desperate people.