The head of a multimillion-dollar payday lending enterprise accused of evading state regulations by using Native American tribes and a bank as fronts was convicted on Monday of federal racketeering conspiracy and fraud charges.
Charles Hallinan charged astronomical interest rates of more than 700 percent on the short-term loans, prosecutors said.
Authorities said the "rent-a-tribe" and "rent-a-bank" scheme netted Hallinan's companies more than $688 million in revenue between 2008 and 2013 from hundreds of thousands of customers.
"Payday lending exploits those who can least afford it, the most financially vulnerable people in our society," U.S. Attorney Louis D. Lappen said. "Today's conviction shows that we will prosecute predatory payday lenders and pursue significant prison sentences for those who financially exploit the economically disadvantaged."
Hallinan's attorney, Edwin Jacobs, did not immediately return a message seeking comment on Monday but has said Hallinan acted within the law.
Also convicted on the conspiracy and fraud charges was Hallinan's company lawyer, Wheeler K. Neff, whose defense attorney has said what the pair did fell into "legal lending models."
Pennsylvania and more than a dozen other states have passed laws that criminalize payday loans, which are named as such because they're issued in small amounts and meant to be repaid on a customer's next paycheck.
Hallinan, 76, and Neff, 69, are scheduled to be sentenced in April, Philly.com reported.