"Godfather Of Payday Lending" Stripped Of $64 Million, Sentenced To 14 Years

“In this industry, to build a big book, you have to run afoul of the regulators” -Charles M. Hallinan

A former Main Line investment banker known as the "Godfather of payday lending" for preying on low-income borrowers was sentenced Friday to 14 years in federal prison and stripped of over $64 million in assets, reports philly.com.

Lawyers for 77-year-old Charles M. Hallinan argued that the prison term might as well be a "death sentence" given his age and declining health, however District Judge Eduardo Robreno gave no quarter as he rendered his verdict after a jury convicted him of 17 counts, including racketeering, international money laundering and fraud. 

“It would be a miscarriage of justice to impose a sentence that would not reflect the seriousness of this case,” Robreno said. “The sentence here should send a message that criminal conduct like [this] will not pay.”

In all, government lawyers estimate, Hallinan’s dozens of companies made $492 million off an estimated 1.4 million low-income borrowers between 2007 and 2013, the period covered by the indictment.

Robreno’s forfeiture order will strip Hallinan of many of the fruits of that business, including his $1.8 million Villanova mansion, multiple bank accounts, and a small fleet of luxury cars, including a $142,000 2014 Bentley Flying Spur. In addition, the judge ordered Hallinan to pay a separate $2.5 million fine. -philly.com

When given the opportunity to address the court before his sentence was handed down, Hallinan remained silent. 

Hallinan's case calls into question the legality of business tactics engaged in by predatory lenders across the country - such as Mariner Finance, a subsidiary of former Treasury Secretary Tim Geithner's private equity firm Warburg Pincus. 

Many of the loans Hallinan made had exorbitant interest rates which greatly exceeded rate caps mandated by the states in which the borrowers live, such as Pennsylvania's 6% annual cap. 

In court Friday, Assistant U.S. Attorney Mark Dubnoff argued that there was little difference between the exorbitant fees charged by money-lending mobsters and the annual interest rates approaching 800 percent that were standard on many of Hallinan’s loans. -philly.com

“The only difference between Mr. Hallinan and other loan sharks is that he doesn’t break the kneecaps of people who don’t pay his debts,” Dubnoff said. “He was charging more interest than the Mafia.”

Hallinan “collect[ed] hundreds of millions of dollars in unlawful debt … knowing that these businesses were unlawful, and all the while devising schemes to evade the law,” wrote Assistant U.S. Attorneys Sara L. Grieb and Maria M. Carrillo.

Hallinan's attorneys argued that Hallinan should receive house arrest after a recent diagnosis of two forms of aggressive cancer.  

“What is just, under the circumstances?” Jacobs asked. “If there is going to be a period of incarceration, one that makes it so that Mr. Hallinan doesn’t survive is not just.”

Judge Robreno largely ignored the plea, though he did give Hallinan 11 days to get his medical affairs in order before he has to report to prison.

Hallinan's orbit

Many of those whose careers Hallinan helped to launch are now headed to prison alongside the "godfather" of payday lending, "a list that includes professional race car driver Scott Tucker, who was sentenced to more than 16 years in prison in January and ordered to forfeit $3.5 billion in assets," reports Philly

Hallinan’s codefendant and longtime lawyer, Wheeler K. Neff, was sentenced in May to eight years behind bars.

Hallinan got into the predatory lending business in the 1990s with $120 million after selling his landfill company to begin making payday loans over phone and fax. He rapidly grew his empire of dozens of companies which offered quick cash under such names as Instant Cash USA, Your First Payday and Tele-Ca$h.  

As more than a dozen states, including Pennsylvania, effectively outlawed payday lending with laws attempting to cap the exorbitant fee rates that are standard across the industry, Hallinan continued to target low-income borrowers over the internet.

He tried to hide his involvement by instituting sham partnerships with licensed banks and American Indian tribes so he could take advantage of looser restrictions on their abilities to lend. But in practice he limited the involvement of those partners and continued to service all the loans from his offices in Bala Cynwyd. -philly.com

He bet his lifestyle on the fact that we would not catch him. He lost that bet,” said U.S. Attorney for the Eastern District of Pennsylvania, William M. McSwain. “Now, it’s time for Hallinan to repay his debt with the only currency we will accept: his freedom and his fortune, amassed at his victims’ expense.”

Comments

MasterPo EmmittFitzhume Tue, 07/10/2018 - 15:06 Permalink

Just some pond scum floating on top of the swamp.

Most people have no clue what is about to be revealed, and it will rock their world. But for those of us that were red-pilled early on, it is heartening to see. 

#WWG1WGA

[Just caught the picture of the mansion.

"There was a crooked man, and he walked a crooked mile,

He found a crooked sixpence against a crooked stile;

He bought a crooked cat which caught a crooked mouse,

And they all lived together in a little crooked house." - Mother Goose

That Mom Goose sure called 'em like she saw 'em...]

In reply to by EmmittFitzhume

any_mouse A Sentinel Tue, 07/10/2018 - 17:19 Permalink

So you think.

Did any peons receive any restitution?

Maybe a buck each from a class action brought on by Saul's Legal Team.

Parasites. Parasites with Political, Financial, and Social control.

Think of the damage a parasite could do, if that parasite could control what the host sees, hears, thinks, feels, and even control the muscles. You would be in pain, but not feel it. You could be poisoning yourself with bitter poison, while believing it is sweet honey.

In reply to by A Sentinel

any_mouse booboo Tue, 07/10/2018 - 16:58 Permalink

"Warburg Pincus" Nope, no rational connections can be made from those names. To do so, would be hate speech.

Dude looks like a leading Hollywood actor, can't think of the name. Maybe it is the actor, playing a role.

He is probably a descendant, why did he get the treatment?

Most likely another false flag. He won't actually go to jail. The mansion will have a new Owner, which was probably going to happen anyway.

The other usurious moneylenders will skate on.

The little people will never be made whole. But they will think that the system served them.

In reply to by booboo

MoreFreedom Mr. Universe Tue, 07/10/2018 - 16:27 Permalink

One thing's for sure.  There won't be any payday lenders operating in Pennsylvania, and poor people who need short term loans to deal with unexpected bills won't be getting any help, and instead will be suffering from the very high interest effective interest rates of late payment penalties.   In defense of Hallinan, he didn't force anyone to sign up for these loans, he didn't break any kneecaps, and I'll bet his customers default on their loans at a high rate.   There is also the legal question of from where the loan is made; given he had partners on Indian reservations and operated over the internet on behalf of those partnerships.  Seems to me, the government is just grabbing this dying man's money.   I'll bet he appeals the conviction to a higher court.  

And does anyone believe US attorney Dubnoff who claims (which begs the question how he knows) that Hallinan charges more interest than the Mafia? 

My other bet: Timothy Geithner won't be prosecuted for using the same tactics.  And the poor will suffer more.  While the article makes hay of Hallinan's wealth, he sold a waste management company (and I wouldn't be surprised there was political corruption involved in its growth given he lived in Philly) for $120 million and was already rich. 

For a perspective in support of pay-day lenders, read these two Reason articles:

http://reason.com/blog/2017/04/13/payday-lenders-check-cashers-servon

http://reason.com/archives/2017/02/18/living-without-banks

Full disclosure: The only money I ever borrowed was a few thousand for a student loan, and for my home mortgage.

In reply to by Mr. Universe

vato poco MoreFreedom Tue, 07/10/2018 - 17:11 Permalink

that's a good post on an issue that's too easy to go all knee-jerk on. +1 for you. 

I've got a coupla terrific young relatives that I'm schooling in financial knowhow - because their parents are knuckleheads about money - and lesson #2 was 'payday loans are financial crack.'

but. 

but the guy's lawyer WAS right to a degree: nobody made those victims/dumbasses sign up for them, and then not pay it back, thus flinging them into the ol' vicious downward spiral. also, there's this little fact: kids, if you find yourself lacking funds for a sudden unexpected financial expense, call it $500, you can 1) bounce a check 2) take a cash advance on your credit card, assuming you have any room left on it or 3) do the payday lender thing. let's say you only need the $ for 10 days, then ... I dunno .... then your tax refund check arrives. 

cost of bouncing check (fees, etc), and bear in mind the bank will clear the big check first, thus making several other small checks bounce = $100? more?

cost of credit-card cash advance = $50, plus or minus

cost of payday loan vig = $15, plus or minus

they're kinda like handguns: just a tool. whether that tool saves your butt or ruins your life is entirely up to you, the adult. (the kids do not like this lesson very much - something about trying to avoid responsibility?)

the world is not necessarily all black and white. that said, I do hope that POS dies of treatable rectal cancer botched horribly by prison docs, resulting in a long, drawn-out, horribly agonizing death in a pink diaper

 

In reply to by MoreFreedom

janus Government nee… Tue, 07/10/2018 - 15:48 Permalink

jews don't get convicted for crimes...on the rare occasion it happens, epic kvetching rumbles from sea to shining sea.  I don't care if it's the rape and murder of a child (Mary Phagan) or high treason (jonathan pollard), jews view themselves as immune to prosecution and punishment.

Let us never forget that the ADL was founded as a response to the rape and murder of 13 year old Mary Phagan.  The citizens of Georgia had the temerity to convict and punish a specimen of swarthy vermin (leo frank).  The ADL concedes frank's guilt in the heinous crime.  Even so, the position of jews is that no jew shall ever see justice.  For when your entire tribe is nothing but a criminal racket, it makes sense that you'd collude to ensure immunity for your fellow gangsters from prosecution.

Any jew who has ever given a dime to the ADL does so in the name of Mary Phagan.

Learn this lurid history, ZHealots: https://en.wikipedia.org/wiki/Leo_Frank

Suppose if white Americans banded together in response to the conviction and execution of Ted Bundy?  This is the kind of people we're dealing with.  Absolutely no shame, no scruples, void of decency and compunction.

My sense it telling me that it's time to suss through the ole JQ.

janus

In reply to by Government nee…

Skripal's Cat janus Tue, 07/10/2018 - 18:54 Permalink

You lie like a rug in the service of hate 😒🤢!

According to the ADL-

“...the Leo Frank case was not the impetus for the founding of the Anti-Defamation League.”

“...the idea for ADL, conceived by Sigmund Livingston, a Chicago attorney, preceded the case.

https://urly.fi/ZPd

“On August 25, 1913, Leo Frank was falsely convicted of murdering Mary Phagan…”

https://urly.fi/ZPc

~~~~~~~

https://urly.fi/ZPe

Pollard served thirty years in jail and is still on supervised release.

 

In reply to by janus

SILVERGEDDON 1982xls Tue, 07/10/2018 - 16:26 Permalink

Fake news - taking down a small fry from the pond.

Meanwhile, the 39 pound lunker bass monster, the FED, is still ass raping the entire country for trillions of dollars.

THAT - is justice, and The American Way.

There will be another " Let them eat cake " moment in history, guaranteed. 

In reply to by 1982xls