A Delaware lawyer has received a lengthy prison sentence for his role in a payday lending scheme that involved lying about his client’s connections with Native American tribes in order to dupe customers into paying interest rates far above the legal limit.
U.S. District Judge Eduardo Robreno of the Eastern District of Pennsylvania on May 25 sentenced Wilmington attorney Wheeler Neff to eight years in prison for his alleged role in the lending scheme, which aimed to collect more than $490 million from illegal payday loans. The sentence included a $50,000 fine and an order for Neff to forfeit more than $356,000 in criminal proceeds.
Neff had been convicted in November on racketeering, conspiracy and fraud charges in connection with the scheme.
In a press release issued after Robreno’s ruling, U.S. Attorney William McSwain for the Eastern District of Pennsylvania said payday loans, which are short-term lending agreements that customers are supposed to pay back with their next paychecks, “prey on those who can least afford it,” and that, “as an attorney, Mr. Neff should realize that a civilized society requires obedience to the law.”
“This defendant has never shown a hint of remorse for his actions nor sympathy for his victims, and during trial he told one lie after another,” McSwain said. “Perhaps a sentence like this will give him time to seriously consider the lives he has impacted.”
According to the release, Neff provided legal work for companies that his co-defendant Charles Hallinan, of Villanova, Pennsylvania, had owned and operated between 1997 and 2013. The release said that, although it is a crime in Pennsylvania to charge more than 25 percent annual interest on a payday loan, Hallinan’s companies collected debt from loans that had interest rates exceeding 780 percent.
The release said that Neff drafted phony contracts made to give the false impression that Hallinan’s companies were owned by Indian tribes that were immune from state laws regarding interest rates. Neff, according to the release, also helped Hallinan defraud nearly 1,400 people who brought a class action suit in Indiana against one of Hallinan’s companies. The release said Neff had made it seem as if the company had no assets, employees or officers, and that it was owned by a Native American chief living in Canada.
The release also said that, in 2011 and 2012, Neff was involved in a similar scheme with another payday lender, who was based in Jenkintown, Pennsylvania. According to the release, Neff was paid hundreds of thousands of dollars a year in legal fees for the work.
Neff is set to report to prison within 45 days, and Hallinan is scheduled to be sentenced in early July, the release noted.
Neff’s attorney Adam Cogan declined to comment for the story.