Posted Aug 12, 2014 04:10 pm CDT
A Tennessee lawyer is facing a criminal usury case in New York, along with a client company owner and his chief executive officer, for allegedly circumventing state law prohibiting high high interest on loans through a complex corporate thicket of payday loan operations.
Owner Carey Vaughn Brown, 55, who started his career as a used-car salesman in Tennessee, attorney Joanna Temple, 58, and CEO Ronald Beaver, 55, are accused in a Manhattan indictment of orchestrating an illegal lending operation characterized by what District Attorney Cyrus R. Vance Jr. called “exhorbitant interest rates and automatic payments from borrowers’ bank accounts,” according to the DealBook page of the New York Times (reg. req.) and a press release by the DA’s office. So-called payday loans are intended to be repaid with the borrower’s next paycheck, but can result in triple-digit interest rates if they are rolled over into the borrower’s next pay period, as often occurs.
With Temple providing legal counsel, Brown operated his MyCashNow.com lending arm in the West Indies, prosecutors say. Along with 11 other companies the trio controlled, which were set up to obscure the connection between the businesses, MyCashNow.com made loans throughout the country between 2001 and 2013, via the Internet, that violated lending laws in New York and other states by charging between 300 and 700 percent interest, according to the DA’s office. All 12 companies also were indicted, along with Brown, Temple and Beaver, who each face 38 usury counts and one conspiracy count.
Under state law, the maximum interest rate that can be charged is 25 percent annually, the New York Times notes.
The DA’s press release says Temple initially was in-house counsel for the payday lending companies, but then formed a Chattanooga-based law firm, Scenic City Legal Group. It is not listed as a defendant, but at least 90 percent of the firm’s work was for Brown’s payday organization, the release states.
Temple’s LInkedIn profile says she earned her law degree at the University of Georgia and formerly worked as a prosecutor and juvenile court judge.
Lawyers for all three individual defendants expressed confidence in their clients in interviews with the Times.
Attorney Paul Shechtman of Zuckerman Spaeder represents Brown and said he “acted in good faith and looks forward to showing his innocence.”
Temple’s lawyer, Priya Chaudhry of Harris, O’Brien, St. Laurent & Chaudhry, said “it remains to be seen whether the advice Ms. Temple gave was incorrect or in violation of any laws.”
Arraigned Monday, Beaver pleaded not guilty and was released on $100,000 bail, the New York Daily News reports. His lawyer, Denis Patrick Kelleher of Clayman & Rosenberg, said he expects Beaver to be fully vindicated, the Times reports.
ABAJournal.com: “Litigation Funding Loan of $1.2M to Law Firm at 40 Percent Interest Not Usurious, Court Rules”