Wilmington lawyer gets 8 years in prison for payday lending scheme

The U.S. attorney said the rates the enterprise charged "would have made Tony Soprano blush."

Steve Tawa
May 25, 2018 - 5:34 pm

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PHILADELPHIA (KYW Newsradio) -- A prominent Wilmington lawyer has been sentenced for his role in a massive "payday" lending scheme, which took advantage of hundreds of thousands of "financially vulnerable" clients, according to federal prosecutors. His co-defendant who led the enterprise, will be sentenced in July. 

Just before sentencing, 69-year old Wheeler Neff, who has been practicing law since 1974, stood up and said "at no time" did he feel that he was "breaking the law," and it was not his "intent to do so." 

In his words, "I should not have turned off my professional skepticism," about how his co-defendant, investment banker Charles Hallinan, weaved native American "sovereign tribal immunity" to arrange their "payday" loans.

"A lawyer should be advising his clients how to comply with laws," said Assistant US Attorney Mark Dubnoff. "Wheeler Neff advised his clients how to evade those laws."

Judge Eduardo Robreno told Neff the scheme was "unlawful and a sham," and then sentenced Neff to eight years in prison. 

Neff and Hallinan were convicted last year on racketeering conspiracy and fraud charges. A jury found they evaded state regulations, by using native American tribes as a front, then paying them to pretend they were the actual lenders. Dubnoff points out Pennsylvania law caps most small personal loans at 6% and bank interest rates on such loans at 24%.

"These loans were typically exceeding 780% per year," he said.

U.S. Attorney Bill McSwain says the "interest rates they charged would have made Tony Soprano blush."

Prosecutors say their "treachery" helped them collect nearly $500 million in debt, between 2008 and 2013, from small, short-term loans, commonly known as "payday" loans, typically paid back with their next paycheck. Pennsylvania is one of more than a dozen states that prohibit payday loans.

The defense will appeal.