Chattanooga Pay Day Lender Charged With Usury in New York

Posted in: Debt Collection

Chattanooga, Tennessee pay day lender Carey Brown is facing criminal usury charges in New York.  Usury is defined as the lending of funds at an exorbitant rate or a rate above that permitted by law.  State law varies on what rate is considered to be usurious.  Brown and two associates are accused of forming shell companies to extend and collect pay day loans at rates above that permitted by law in the State of New York.

Pay day loans offer the promise of quick cash that must be repaid with interest once the borrower receives their next paycheck.  While New York law caps interests rates at 25%, the companies’ rates ranged between 350% and 650%. The Manhattan District Attorney, Cyrus R. Vance, Jr., described the practice as “exploitive” and “sadly typical of this industry as a whole.”

Brown made his fortune selling used cars.   The corporate entities crafted by Brown were allegedly designed to hide the true owners and the origination of the loans.  Some were formed offshore or on Indian reservations.  Prosecutors say that the site MyCashNow.com was incorporated in the West Indies to place the company beyond the reach of U.S. authorities.  The number of entities (twelve) further obscured the trail leading back to Brown.  Brown’s alleged legal advisor Joanna Temple and COO Ron Beaver are also charged.