NEW YORK (Reuters) – A Kansas City, Missouri businessman was sentenced to 10 years in prison on Tuesday after he was found guilty running a $220 million payday lending scheme that charged illegally high interest rates and signed up borrowers without their consent, federal prosecutors said.
Richard Moseley, 73, was sentenced by U.S. District Judge Edgardo Ramos in Manhattan, according to the office of U.S. Attorney Geoffrey Berman in Manhattan. His lawyers could not immediately be reached for comment.
“Richard Moseley’s illegal payday lending operation exploited more than half a million of the most financially vulnerable people in the U.S.,” Berman said in a statement. “Charging usurious interest and exorbitant fees, and even signing people up for loans they didn’t authorize, Moseley put financially struggling people even further in debt.”
Moseley had been convicted of six counts including wire fraud and aggravated identity theft in November after a 2-1/2-week trial.
He was charged in February 2016 as the federal government cracked down on abuses by payday lending companies.
Such companies say they help struggling consumers by offering small loans that borrowers agree to repay in a short time, often from their next paycheck. Critics say they saddle borrowers with large debt loads resulting from high interest rates and fees. Some states have banned payday lending.
Prosecutors have said that from 2004 to September 2014, Moseley’s businesses made “predatory” loans to more than 620,000 Americans, often downplaying the financing costs and charging effective annual interest rates that could top 700 percent.
Moseley spent some of the millions of dollars he made from the scheme on a Mexico vacation home, luxury cars and country club dues, according to prosecutors.
Others charged in the federal crackdown on payday lending include racecar driver Scott Tucker and attorney Timothy Muir, who were found guilty last year of crimes related to a $3.5 billion payday lending operation. Tucker was sentenced to 16 years and 8 months in prison in January, while Muir was sentenced to 7 years.
Reporting by Brendan Pierson in New York; Editing by Richard Chang