Payday Lender gets Federal Time

Wonderful!!! They should all be behind bars!

HVN Great post. Do you have any of the names of his PDLs

Unfortunately, the articles did not list business names other then the Texas Advance Internet and Advance Internet.
I was searching for the court docs but I cant find anything so far. The sentencing was last month, maybe its too early to see anything specific on the case?

That is wonderful news!! Think they all need to be locked up for cheating people!! I would be very interested in what PDL companies he ran also, especially since I am in NC!!!

I was hoping for more details; i.e. what he did to run 'afoul' of other states.
May other states learn of Florida's success! I hope more states will follow their lead.
It was nice to read of the financial restitution he was ordered to provide in Texas, too.

Great news...thanks for posting that!!

Another article about him:

[quote]Tale of Alabama man's payday lending schemes: Meet John Gill, Jr.
July 20, 2006 - Phenix City, Alabama

Meet John Gill Jr. For at least 14 years, various payday loan schemes he operated around the country have made him a very rich man.

The 48-year-old lives in a wealthy area north of Phenix City, Ala., in a waterfront home on the Chattahoochee River, which divides Alabama and Georgia. Columbus, Ga., sits across the river from Phenix City.

Gill's operations since 1992 have landed him in trouble with the law in Alabama, Colorado, Florida, Georgia, Louisiana, New York, North Carolina, South Carolina, Texas, Virginia and Washington.

But despite cease and desist orders, consent orders, assurances of discontinuance, injunctions, settlement agreements and appellate court decisions from states across the country, Gill often keeps right on operating in the same location by simply changing his companies' names, its principals or guise to conceal his ongoing illegal payday loan activities, sources say.

His companies, which the Texas attorney general charges are really loan-sharking operations targeting military personnel, charge as much as 782 percent interest a year.

In response to a Georgia class action suit in 2003, Gill filed for bankruptcy and "purportedly took a vow of poverty and conveyed all his assets to the 'Ten Talents Ministry' and related entities, which he controlled," to merely avoid civil and criminal liability, First Judicial Circuit Court records in Escambia County reveal.

But will Gill finally face criminal charges that land him behind bars? Will his businesses finally be closed once and for all?

Maybe. Maybe not.

The "lender in disguise," as he has been called by state authorities, is scheduled for trial Monday, July 24 in state court in Pensacola on a first-degree felony charge of unlawfully conducting a business enterprise under the state's anti-racketeering laws.

It's a case that's drawing national interest from consumer groups, such as the Durham, N.C.-based Center for Responsible Lending.

They're not only interested because it's Gill, whose antics ended up in the New York Times in a 2004 story when the New York Attorney General accused him of making "unlawful and deceptive" loans, but because the case is a criminal one.

CRL Senior Policy Counsel Yolanda McGill says unscrupulous businessmen, like Gill, often face action from overmatched state regulatory agencies, which lack any real ability to levy fines or other penalties to shut them down.

"We're very interested to see how a felony case works out," McGill says. "Regulatory action has not been able to stop a guy like this. They just don't have the tools in the toolbox to stop him. That's obvious when I see an actor like John Gill at it for so long and making a killing doing it. It's apparent that it's a business decision of his to take a lot of risks, pay a fine and keep going. I don't think the John Gills are as rare as the payday lending industry says they are."

Assistant State Attorney Russ Edgar says Gill and his associates for years have persisted in "criminal usury and loan sharking" in recently filed Circuit Court legal documents.

"It is Gill's history of obfuscation and deceit, which the state intends to use to prove his intent, plan, knowledge, identity and absence of mistake in this case," Edgar says. "In spite of the multiple actions by state authorities over a period of years, Gill continued to operate in the same manner, as part of a plan, and not from any mistake."

Gill and his attorney, O. Hale Almand Jr., of Macon, Ga., don't just have Escambia County to worry about. Almand did not return an Independent News call to answer questions about Gill and this case.

Almand is also busy defending Gill in Texas. There, Texas Attorney General Greg Abbott froze Gill's assets and sued his company in May for violating Texas finance laws and the Texas Deceptive Trade Practices Act by charging interest rates as high as 782 percent on short-term cash advance loans.

"These unlicensed practices are outrageous and are deliberately designed to target military families with extremely high-interest loans, putting consumers into a never-ending cycle of debt," Abbott says. "Consumers have a right to do business with honest loan companies without the double talk, so in this case, we will ask the court to order restitution for all Texans who were harmed by this subterfuge."

So how does Gill's scheme work in Pensacola and places across the country in states that allow so-called payday lending centers or not?

He operates under the guises of check cashing or cash rebate services in connection with the sale of catalog gift certificates, Internet access, phone cards or a combination of them.

Here, Gill's company was called Florida Internet.

Under its operation, for example, a consumer seeking a "payday loan" is instead given a $100 cash "rebate" for Internet access. But the company withdraws $30 from the consumer's bank account every two weeks for up to a year until the $100 is repaid, which equals 782 percent interest per year. The greater the rebate the greater the amount of "access" time the customer is offered to the Internet. If a consumer is able to repay the $100, the company tried to disguise the loan as a "termination fee" for the Internet service.

Consumers also sign a contract agreeing to a "waiver of jury trial and arbitration" before receiving the initial loan. The company claims that the contract releases it from liability, removes the threat of class action suit and allows it to enforce debt collection.

The 21-page Texas lawsuit against Gill's companies, Advance Internet and Texas Advance Internet, says the transactions are a loan and calls the purchase of Internet access "bogus."

Under Florida law, payday loan centers are allowed. Although some state measures protect the consumer, such as forbidding the rollover of payday loans, they fail to address the issue of "abusive" interest rates.

Norman Wright, Better Business Bureau president in Pensacola, says no complaints have been lodged against local outlets since 2004. But he warns consumers to pay back the loans with their next paycheck and to check out all the terms.

"It's a service for some," he says. "But the key point to it is to only borrow as much as you can afford to pay back with your next paycheck. It can be extremely costly."

In fact, the Center for Responsible Lending says annual interest rates are typically 400 percent or higher. And the average payday borrower ends up paying $800 to borrow $325.

In an industry that was virtually non-existent more than a decade ago, it's estimated the payday lending industry grew from $10 billion in 2000 to $25 billion in 2003.

And the CRL's McGill says Gill and others like to prey on military personnel.

In fact, research by the organization finds that active-duty military are three times more likely than civilians to take out a payday loan, and one in five, or 20 percent, of military were payday borrowers last year.

"They make ideal customers for these type of operators," McGill says. "Often, military personnel are living paycheck to paycheck; they're young and may be away from home for the first time; they have a steady, verifiable paycheck; they're unsophisticated; and they want to buy stuff to impress their friends. The trap is sprung."

A Pentagon study is expected to come out any day now and blast the companies for affecting military readiness.

U.S. Senators and U.S. House members are also expected to debate capping payday loans at 36 percent annually for military personnel in an upcoming conference on the defense spending bill.

Some have called for an outright ban on payday lending to troops.

The U.S. Marine Corps at Camp Lejune in North Carolina did ban Gill's company in 1998, but such bans have rarely been used, Pentagon officials report.

A 2005 study by Christopher Peterson, an assistant professor at the Levin College of Law at the University of Florida, and Steven Graves, an assistant professor of geography at California State University-Northridge, found payday lenders in greater numbers and higher densities around military bases. They looked at 109 bases in 20 states and nearly 15,000 payday shops.

They conclude: "Payday lenders crowd around the gates of military bases like bears on a trout stream."

Meanwhile, Gill continues to stay in business.

Gill operates, even though the Louisiana Department of Economic Development filed cease and desist orders for excessive financial charges in October 1992; Colorado officials found him in violation in June 1993; an Alabama grand jury ruled he was in violation of the state's small loans act and he was banned from the state in November 1993; Washington authorities ordered him to cease operations when he acknowledged their findings and paid a $23,600 fine; and so on and so forth until the upcoming racketeering case in Pensacola.

"He has disguised a lot of his entities, avoids being caught and keeps right on going," says McGill, the CRL counsel. "He has been a very busy man. It shows how very difficult it is for states to regulate payday lending. Allowing it but regulating bad practitioners is almost oxymoronic."

But Gill and consumer advocates will soon learn whether a criminal prosecution in Pensacola can put him out of business.[/quote]

He was another "rebate" loan type of pdl. Those are the most blantantly illegal ones there are.

And:

[quote]State sues El Paso payday lender, claims loan shark operation

May 23, 2006 - El Paso, Texas

An El Paso judge has frozen the assets of a payday loan business as part of a lawsuit by state officials charging that the company is really a loan-sharking operation targeting military personnel.

State Commissioner of Consumer Credit Leslie Pettijohn accused John A. Gill Jr., owner of Advance Internet and Texas Advance Internet, of making short-term cash advance loans at inflated interest rates.

The 21-page lawsuit filed in El Paso last week alleges that Gill, whose company was not licensed in Texas, charged as much as 782 percent interest and offered Internet service as a perk for doing business with the company.

The suit also charges that Gill of Phenix City, Ala., targeted military personnel by putting his loan stores "conspicuously close" to military bases in El Paso, Coryell, Bell and Bexar counties.

Gill, whose listed telephone number is disconnected, could not immediately be reached for comment.[/quote]

And another one:

[quote]Lenders in Disguise
No military bases in New York State were included in the professors' study, they said, because payday lending is illegal in the state. But that came as news to Tonya Duncan, whose husband is completing a year in Iraq with the Army in the 10th Mountain Division, a unit based at Fort Drum in Watertown.

Mrs. Duncan said she had borrowed money "about four or five times in the last six months" from N.Y. Catalog Sales, a local business on the edge of a mall parking lot near the base.

The catalog sales outlet is typical of a motley collection of high-cost lenders who regulators say are operating in disguise, chiefly in states like New York and North Carolina, which prohibit payday loans.

Their role as payday lenders seems clear to customers like Mrs. Duncan. To borrow $300 in cash from N.Y. Catalog Sales, she said, she writes a check for $390, which the catalog sales shop will not cash until payday. But there is a twist: in addition to $300 in cash, she gets $90 in gift certificates to spend on merchandise shown in a dog-eared catalog chained to the counter.

"So it's a loan, yes, but it's a loan with no interest," she said.

Stacy Kruse, another Fort Drum spouse who used to borrow regularly from N.Y. Catalog Sales, has a different view of the certificates. "We just threw them out," she said. "I looked at the catalog and it's just junk."

Besides, she said: "Who on earth would buy gift certificates to order stuff to be delivered months from now, when you can buy better, cheaper stuff at Wal-Mart the same day? Obviously, you go there to get a loan."

Eliot Spitzer, the New York attorney general, agrees. In September, his office filed a lawsuit accusing N.Y. Catalog Sales and the man listed as its "principal," an Alabama businessman named John A. Gill Jr., of making "unlawful and deceptive" loans.

Mr. Gill, in an affidavit, denied that he had a stake in the company. The store's regional manager, the wife of a soldier at Fort Drum, insisted in court filings that the stores did not make loans. The case is pending.

About 1,200 miles south of Fort Drum, in a string of storefront shops near the Jacksonville Naval Air Station in Florida, is another small business set up by Mr. Gill.

It used to do business as Florida Catalog Sales and is now called Florida Internet. One customer was Petty Officer Mark L. Foster Jr., 21, a helicopter mechanic at the base.

Last spring, just after signing a lease on an apartment, Petty Officer Foster was sent to sea earlier than he had expected. Unable to arrange for his rent to be paid in his absence, he said, he was evicted. The resulting expenses drove him to seek a $500 loan from Florida Internet.

The paperwork he signed gave him an "instant cash rebate" of $500. But it also obligated him to buy a year's worth of Internet access at the extraordinary price of $100 every two weeks. To cancel, he had to pay back $600 - the $500 "rebate" plus the initial $100 in "usage fees."

"I didn't want Internet access; I never used it," Petty Officer Foster said. All he wanted was the money, he said. He quickly realized that he could wind up paying as much as $2,100 in interest on his $500 loan, an annual interest rate of 420 percent. So he went to the local office of the Navy-Marine Corps Relief Society, which gave him an interest-free loan to pay off his $600 obligation.

Regulators in Florida contend that Florida Internet is an illegally disguised payday lender. In July, state prosecutors filed criminal racketeering charges against the company; similar charges were filed against Mr. Gill in September. Both he and Florida Internet have denied the charges and are awaiting trial.

Mr. Gill's lawyer, O. Hale Almand of Macon, Ga., would not comment "because of the pending criminal charges," he said.[/quote]

Last one I'm going to post: