Carey Vaughn Brown, who owns the companies, was charged along with two of his associates with operating a “systemic and pervasive usury scheme” involving offshore registration, as reported by the New York Times. The scheme turned a profit of about US
$ 150 million in 2012, according to the NY Daily News.
The indictment describes a “payday syndicate” that controlled the entire loan process, from extending loans to processing payments and collecting from borrowers behind on their bills. It states that Brown, along with the chief operating officer of several of the companies, Ronald Beaver, and legal advisor Joanna Temple, “carefully crafted their corporate entities to obscure ownership and secure increasing profits.”
According to the NY Daily News, the scheme entailed providing illegal short-term loans at more than 300 percent interest per year to victims often desperate for money. One of the companies collected about $50 million in 2012, while mostly providing loans below $1,000.
The network of domestic and offshore companies recruited borrowers online, and apart from illegal interest rates, the companies set mounting fees for extensions on the two-week loans.
