Main Line ‘Payday Loan Godfather’ Jailed | New
PHILADELPHIA >> A 77-year-old Main Line man described as the “godfather of payday loans” was sentenced to 168 months in federal prison on Friday and fined $ 2.5 million.
Charles Hallinan, 77, of the Villanova section of Radnor Township, has been jailed in a scheme to collect hundreds of millions of dollars in illegal debt obtained through high-interest loans. He was also ordered to forfeit more than $ 64 million earned from his illegal acts, as well as several luxury automobiles and his Main Line mansion.
In November 2017, a federal jury convicted Hallinan of the 17 counts of criminal conduct that the government charged in its previous indictment: two counts of conspiring to violate the law on organizations influenced and corrupted by racketeers (RICO); one count of conspiracy to commit postal fraud, electronic fraud and money laundering; two counts of postal fraud and aiding and abetting; three counts of wire fraud and aiding and abetting; and nine counts of international money laundering and aiding and abetting.
Hallinan, a former investment banker, was in the payday lending industry from at least 1997 to 2013, according to U.S. Attorney William M. McSwain.
Dubbed “the godfather of payday loans” by the media during his trial, Hallinan owned, operated, and financed companies that issued small, fixed-fee loans and collected over $ 690 million in debts on those loans. Loans are known in the industry as “payday loans” because borrowers often take them out to cover their expenses, then pay off the principle, plus fees and interest, with their next paychecks or other paychecks. stable income, such as social security payments. Hallinan made his fortune illegally by charging fixed fees and high interest rates far beyond what was permitted by state usury laws.
“Charles Hallinan, a sophisticated and highly educated businessman, was nothing more than a loan shark whose entire business model rested on trapping his victims in a never-ending cycle of debt,” said McSwain. “For years this defendant has shamelessly attacked those who could least afford it – distressed borrowers who often made these loans to pay for basic necessities. He bet his lifestyle that we wouldn’t catch him. He lost that bet, ”McSwain commented. “Now it is time for Hallinan to repay his debt with the only currency we will accept: his freedom and his fortune, amassed at the expense of his victims.”
The government proved at trial that Hallinan knew the loans violated state law, so it hid his personal involvement behind a series of “straw” lenders, including a federally insured bank and three Indian tribes. Hallinan’s co-accused, Delaware attorney Wheeler K. Neff, helped Hallinan structure the scam and hide Hallinan’s involvement. Neff was sentenced in May 2018 to eight years in prison for his participation in the scheme.
“Charles Hallinan devised a horrible way to make a pretty dime,” said Michael T. Harpster, special agent in charge of the Philadelphia Division of the FBI. “This multimillionaire was living largely on the proceeds of his shady payday lending empire, built on the backs of people literally living paycheck to paycheck. Exorbitant fees and usurious interest rates were the name of the game, and Hallinan always came out on top. Well, not this time. Now he walks away in handcuffs and heads towards a federal prison.
As part of the sentence, the government has sought and obtained a major confiscation judgment against Hallinan, which will deprive him of the pitfalls of the success he has gained as a result of his unlawful conduct. The district court ordered the defendant to pay a forfeiture judgment of just over $ 64 million as proceeds of the RICO conspiracy, and also ordered him to waive his interest on approximately $ 1.2 million funds in 18 bank accounts; two Mercedes Benz vehicles; a Bentley vehicle; and his mansion Villanova.
“IRS Criminal Investigation is committed to using our forensic accounting skills to help unravel complex financial fraud and money laundering schemes,” said Guy Ficco, IRS Criminal Investigation Special Agent. “We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to get rich by fraudulent means. Charles Hallinan’s prison sentence reminds us that there are harmful consequences for this type of criminal behavior.
Daniel Brubaker, inspector in charge of the US Postal Inspection Service, Philadelphia Division, praised the investigative work behind the conviction: “This office is proud to investigate this type of criminal behavior. We, too, are proud to have worked with our law enforcement partners to aggressively investigate those who plot to prosper at the expense of others. “
The matter was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations and the United States Postal Inspection Service. He is being pursued by Deputy United States Attorneys Mark B. Dubnoff and Maria Carrillo.